Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Modify the Listing of Additional Shares Fees Payable by Non-U.S. Companies, 75631-75633 [2013-29619]
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Federal Register / Vol. 78, No. 239 / Thursday, December 12, 2013 / Notices
deem fee levels at a particular venue to
be excessive. In such an environment,
the Exchange must continually adjust its
fees to remain competitive with other
exchanges and to attract order flow to
the Exchange. The Exchange believes
that the proposed rule change reflects
this competitive environment because it
reduces the Exchange’s fees in a manner
that encourages market participants to
direct their customer order flow, to
provide liquidity, and to attract
additional transaction volume to the
Exchange. Given the robust competition
for volume among options markets,
many of which offer the same products,
implementing a volume based customer
rebate program to attract order flow like
the one being proposed in this filing is
consistent with the above-mentioned
goals of the Act. This is especially true
for the smaller options markets, such as
MIAX, which is competing for volume
with much larger exchanges that
dominate the options trading industry.
As a new exchange, MIAX has a
nominal percentage of the average daily
trading volume in options, so it is
unlikely that the customer rebate
program could cause any competitive
harm to the options market or to market
participants. Rather, the customer rebate
program is a modest attempt by a small
options market to attract order volume
away from larger competitors by
adopting an innovative pricing strategy.
The Exchange notes that if the rebate
program resulted in a modest percentage
increase in the average daily trading
volume in options executing on MIAX,
while such percentage would represent
a large volume increase for MIAX, it
would represent a minimal reduction in
volume of its larger competitors in the
industry. The Exchange believes that the
proposal will help further competition,
because market participants will have
yet another additional option in
determining where to execute orders
and post liquidity if they factor the
benefits of a customer rebate program
into the determination.
maindgalligan on DSK5TPTVN1PROD with NOTICES
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)(ii) of the Act.14 At any time
within 60 days of the filing of the
14 15
U.S.C. 78s(b)(3)(A)(ii).
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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 email to rule-comments@
sec.gov. Please include File Number
SR–MIAX–2013–56 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–MIAX–2013–56. 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 the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
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75631
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–MIAX–
2013–56 and should be submitted on or
before January 2, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–29608 Filed 12–11–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71017; File No. SR–
NASDAQ–2013–134]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change to Modify the
Listing of Additional Shares Fees
Payable by Non-U.S. Companies
December 6, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 2 thereunder,
notice is hereby given that on November
29, 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 NASDAQ. 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
NASDAQ is proposing to modify the
listing of additional shares fees payable
by non-U.S. companies.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaq.cchwallstreet.com, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
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. The text of
these statements may be examined at
15 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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Federal Register / Vol. 78, No. 239 / Thursday, December 12, 2013 / Notices
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’s listing of additional shares
fees are designed, in part, to offset the
costs of NASDAQ’s regulatory program
associated with oversight of listed
companies, including the review of
share issuances for compliance with the
shareholder approval and voting rights
rules, the regulatory review of entities
and individuals that purchase a
significant interest in a listed company
in a transaction with the company, and
NASDAQ’s efforts to increase the
transparency of interpretations of its
rules. Currently, the applicable fees
depend on whether the company is a
domestic or non-U.S. company.
Domestic companies pay a fee of $0.01
per share, subject to a minimum
quarterly fee of $5,000, for any amount
of shares in excess of 49,999 shares
issued during a quarter, and a maximum
fee of $65,000 per year.3 In contrast,
non-U.S. companies pay a flat fee of
$5,000 for any amount of shares in
excess of 49,999 shares issued during a
year.4 There is no fee for issuances of up
to 49,999 shares per quarter for
domestic companies and up to 49,999
shares per year for non-U.S. companies.
NASDAQ proposes to make two
changes to the listing of additional
shares fees payable by non-U.S.
companies. First, NASDAQ proposes to
modify the rule such that a foreign
company that is not a Foreign Private
Issuer 5 pays the same listing of
additional shares fees as a domestic
company. For purposes of NASDAQ’s
other rules, a foreign company that is
not a Foreign Private Issuer is treated
the same as a domestic company.6
Further, unlike a Foreign Private Issuer,
a foreign company that is not a Foreign
Private Issuer files the same quarterly
maindgalligan on DSK5TPTVN1PROD with NOTICES
3 Rules
5910(b)(1) and 5920(b)(1).
4 Rules 5910(b)(2) and 5920(b)(2).
5 ‘‘Foreign Private Issuer’’ is defined in Rule 3b–
4 under the Act, 17 CFR 240.3b–4. See Rule
5005(a)(18). A foreign company that is not a Foreign
Private Issuer would be considered a ‘‘foreign
issuer’’ under Rule 3b–4. A foreign issuer is also
defined to include a foreign government that issues
securities.
6 For example, while a Foreign Private Issuer can
rely on an exemption from most of NASDAQ’s
corporate governance requirements under Rule
5615(a)(3), a foreign company that is not a Foreign
Private Issuer is not eligible for that exemption.
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reports as a domestic company 7 and is
typically not primarily traded on
another marketplace. As such, NASDAQ
believes it is appropriate to treat these
companies the same as domestic
companies for purposes of the listing of
additional shares fee because they are
subject to the same rules and generally
trade primarily on NASDAQ.
Second, NASDAQ proposes to
increase the listing of additional shares
fee applicable to Foreign Private Issuers
from $5,000 to $7,500 per year effective
January 1, 2014. As under the current
rule, no fee would be charged for
issuances of up to 49,999 shares per
year. NASDAQ believes this change
would reduce the current disparity in
the listing of additional shares fees paid
by Foreign Private Issuers, which also
benefit from NASDAQ’s regulatory
program, and other companies, while
still recognizing that those Foreign
Private Issuers generally also trade on
another marketplace and are subject to
an exemption from many of NASDAQ’s
corporate governance rules. While the
proposed $7,500 per year fee would
exceed the $5,000 minimum fee
applicable to companies that are not
Foreign Private Issuers, NASDAQ
believes that this higher fee is
appropriate given that fee [sic] for
Foreign Private Issuers is assessed
annually, instead of quarterly, and that
Foreign Private Issuers are not subject to
per share fees, which can range as high
as $65,000 per year.8
NASDAQ will implement these
changes on January 1, 2014.9 A foreign
company that is not a Foreign Private
Issuer will first owe the $0.01 per share
listing of additional shares fee for the
change in shares outstanding during its
first fiscal quarter beginning on or after
January 1, 2014.10 A Foreign Private
Issuer will be subject to the new $7,500
fee for the change in its shares
outstanding starting with its first fiscal
year beginning on or after January 1,
7 Under SEC Rule 13a–13(b)(2), 17 CFR 240.13a–
13(b)(2), a Foreign Private Issuer is not required to
file quarterly reports with the Commission.
8 NASDAQ also proposes to make nonsubstantive changes to replace the term ‘‘issuer’’
with the defined term ‘‘Company’’ throughout the
rules and to improve readability of the rule text.
9 Until January 1, 2014, the online NASDAQ rule
book will reflect the currently effective fees with a
note indicating that this fee change is pending and
will become effective on January 1, 2014. The
online NASDAQ rule book will also contain a link
to the text of the revised rule.
10 For example, a company with a December 31st
year end would first owe the fee under Rule
5910(b)(1) or Rule 5920(b)(1) for the change in its
shares outstanding during its first quarter, as reflect
[sic] in the difference between the shares
outstanding reported on its Form 10–K for the year
ended December 31, 2013, and its Form 10–Q for
the quarter ended March 31, 2014.
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2014.11 Following effectiveness, if a
company ceases to be a Foreign Private
Issuer, it will be assessed the listing of
additional shares fee based on its new
status effective with the start of its next
fiscal year, when it is also required to
start filing Forms 10–Q and 10–K.12 If a
company becomes a Foreign Private
Issuer, it similarly will become subject
to the fee applicable to Foreign Private
Issuers at the beginning of its next fiscal
year.
2. 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 Sections 6(b)(4) and (5)
of the Act,14 in particular, in that it
provides for the equitable allocation of
reasonable dues, fees, and other charges
among its members, issuers and other
persons using its facilities, and does not
unfairly discriminate between
customers, issuers, brokers or dealers.
NASDAQ believes that the proposed
fees are reasonable and not unfairly
discriminatory because they will better
allocate costs of NASDAQ’s regulatory
program across the listed companies
that benefit from that program.
NASDAQ believes that the proposed
$2,500 increase in the listing of
additional shares fee applicable to
Foreign Private Issuers is reasonable and
an equitable allocation of a portion of
the costs of NASDAQ’s regulatory
program, which benefits these
companies. While the proposed $7,500
per year fee would exceed the $5,000
minimum quarterly fee applicable to
companies that are not Foreign Private
Issuers, NASDAQ believes that this
higher fee is appropriate given that
Foreign Private Issuers are not subject to
per share fees, which can range as high
as $65,000 per year. In addition,
continuing a separate, lower fee for
Foreign Private Issuers remains a
reasonable and equitable allocation of
fees because Foreign Private Issuers
generally trade on another marketplace
and have exemptions available to many
of NASDAQ’s governance rules,
11 A Foreign Private Issuer with a December 31st
fiscal year will first pay the new fee for shares
issued between January 1, 2014 and December 31,
2014 and will be billed for those share issuances
based on the Form 20–F filed in 2015.
12 A foreign company is required to determine
whether it is a Foreign Private Issuer on an annual
basis as of the end of its second fiscal quarter. If
the company determines that it is no longer a
Foreign Private Issuer, it must transition to
domestic reporting status beginning on the first day
of the next fiscal year. SEC Rule 3b–4(e), 17 CFR
240.3b–4(e).
13 15 U.S.C. 78f.
14 15 U.S.C. 78f(b)(4) and (5).
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Federal Register / Vol. 78, No. 239 / Thursday, December 12, 2013 / Notices
including the shareholder approval and
voting rights rules.
NASDAQ also believes that it is
reasonable and not unfairly
discriminatory to charge a foreign
company that is not a Foreign Private
Issuer the same fee as a domestic
company. The listing situation of a
foreign company that is not a Foreign
Private Issuer is more similar to a
domestic company than it is to a
Foreign Private Issuer in that a Foreign
Private Issuer often will trade on
another marketplace and is subject to
exemptions from many of NASDAQ’s
corporate governance rules. On the
other hand foreign companies that are
not Foreign Private Issuers, like
domestic companies, do not typically
trade on other marketplaces and are not
eligible to exemptions from the
governance requirements. Similarly, a
Foreign Private Issuer receives different
treatment under the Commission’s rules
than a foreign company that is not a
Foreign Private Issuer.15
Finally, NASDAQ believes that the
proposed fees are consistent with the
investor protection objectives of Section
6(b)(5) of the Act 16 in that they are
designed to promote just and equitable
principles of trade, to remove
impediments to a free and open market
and national market system, and in
general to protect investors and the
public interest. Specifically, the fees are
designed to ensure that there are
adequate resources for NASDAQ’s
listing compliance program, which
helps to assure that listing standards are
properly enforced and investors are
protected.
maindgalligan on DSK5TPTVN1PROD with NOTICES
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.
The market for listing services is
extremely competitive and listed
companies may freely choose alternative
venues based on the aggregate fees
assessed, and the value provided by
each listing. This rule proposal does not
burden competition with other listing
venues, which are similarly free to set
their fees. For these reasons, NASDAQ
does not believe that the proposed rule
change will result in any burden on
competition for listings.
15 For example, a Foreign Private Issuer is not
required to file quarterly reports and is exempt from
the proxy rules. See SEC Rules 13a–13(b)(2), 17 CFR
240.13a–13(b)(2), and 3a12–3(b), 17 CFR 240.3a12–
3(b).
16 15 U.S.C. 78f(b)(5).
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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
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 17 and paragraph (f) of Rule
19b–4 thereunder.18 At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml; or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2013–134 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–2013–134. 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 the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NASDAQ–2013–134 and should be
submitted on or before January 2, 2014
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013–29619 Filed 12–11–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71019; File No. SR–
BSECC–2013–001]
Self-Regulatory Organizations; Boston
Stock Exchange Clearing Corporation;
Notice of Filing of Proposed Rule
Change To Amend the Restated
Certificate of Incorporation and ByLaws of The NASDAQ OMX Group, Inc.
December 6, 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 November
27, 2013, the Boston Stock Exchange
Clearing Corporation (‘‘BSECC’’) 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 BSECC. 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
BSECC is filing this proposed rule
change with respect to amendments of
the Restated Certificate of Incorporation
(the ‘‘Charter’’) and By-Laws (the ‘‘ByLaws’’) of its parent corporation, The
NASDAQ OMX Group, Inc. (‘‘NASDAQ
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b-4.
17 15
U.S.C. 78s(b)(3)(A).
18 17 CFR 240.19b–4(f).
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Agencies
[Federal Register Volume 78, Number 239 (Thursday, December 12, 2013)]
[Notices]
[Pages 75631-75633]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-29619]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71017; File No. SR-NASDAQ-2013-134]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
to Modify the Listing of Additional Shares Fees Payable by Non-U.S.
Companies
December 6, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on November 29, 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 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 is proposing to modify the listing of additional shares fees
payable by non-U.S. companies.
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaq.cchwallstreet.com, at the principal office of
the Exchange, and at the Commission's Public Reference Room.
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. The
text of these statements may be examined at
[[Page 75632]]
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's listing of additional shares fees are designed, in part,
to offset the costs of NASDAQ's regulatory program associated with
oversight of listed companies, including the review of share issuances
for compliance with the shareholder approval and voting rights rules,
the regulatory review of entities and individuals that purchase a
significant interest in a listed company in a transaction with the
company, and NASDAQ's efforts to increase the transparency of
interpretations of its rules. Currently, the applicable fees depend on
whether the company is a domestic or non-U.S. company. Domestic
companies pay a fee of $0.01 per share, subject to a minimum quarterly
fee of $5,000, for any amount of shares in excess of 49,999 shares
issued during a quarter, and a maximum fee of $65,000 per year.\3\ In
contrast, non-U.S. companies pay a flat fee of $5,000 for any amount of
shares in excess of 49,999 shares issued during a year.\4\ There is no
fee for issuances of up to 49,999 shares per quarter for domestic
companies and up to 49,999 shares per year for non-U.S. companies.
---------------------------------------------------------------------------
\3\ Rules 5910(b)(1) and 5920(b)(1).
\4\ Rules 5910(b)(2) and 5920(b)(2).
---------------------------------------------------------------------------
NASDAQ proposes to make two changes to the listing of additional
shares fees payable by non-U.S. companies. First, NASDAQ proposes to
modify the rule such that a foreign company that is not a Foreign
Private Issuer \5\ pays the same listing of additional shares fees as a
domestic company. For purposes of NASDAQ's other rules, a foreign
company that is not a Foreign Private Issuer is treated the same as a
domestic company.\6\ Further, unlike a Foreign Private Issuer, a
foreign company that is not a Foreign Private Issuer files the same
quarterly reports as a domestic company \7\ and is typically not
primarily traded on another marketplace. As such, NASDAQ believes it is
appropriate to treat these companies the same as domestic companies for
purposes of the listing of additional shares fee because they are
subject to the same rules and generally trade primarily on NASDAQ.
---------------------------------------------------------------------------
\5\ ``Foreign Private Issuer'' is defined in Rule 3b-4 under the
Act, 17 CFR 240.3b-4. See Rule 5005(a)(18). A foreign company that
is not a Foreign Private Issuer would be considered a ``foreign
issuer'' under Rule 3b-4. A foreign issuer is also defined to
include a foreign government that issues securities.
\6\ For example, while a Foreign Private Issuer can rely on an
exemption from most of NASDAQ's corporate governance requirements
under Rule 5615(a)(3), a foreign company that is not a Foreign
Private Issuer is not eligible for that exemption.
\7\ Under SEC Rule 13a-13(b)(2), 17 CFR 240.13a-13(b)(2), a
Foreign Private Issuer is not required to file quarterly reports
with the Commission.
---------------------------------------------------------------------------
Second, NASDAQ proposes to increase the listing of additional
shares fee applicable to Foreign Private Issuers from $5,000 to $7,500
per year effective January 1, 2014. As under the current rule, no fee
would be charged for issuances of up to 49,999 shares per year. NASDAQ
believes this change would reduce the current disparity in the listing
of additional shares fees paid by Foreign Private Issuers, which also
benefit from NASDAQ's regulatory program, and other companies, while
still recognizing that those Foreign Private Issuers generally also
trade on another marketplace and are subject to an exemption from many
of NASDAQ's corporate governance rules. While the proposed $7,500 per
year fee would exceed the $5,000 minimum fee applicable to companies
that are not Foreign Private Issuers, NASDAQ believes that this higher
fee is appropriate given that fee [sic] for Foreign Private Issuers is
assessed annually, instead of quarterly, and that Foreign Private
Issuers are not subject to per share fees, which can range as high as
$65,000 per year.\8\
---------------------------------------------------------------------------
\8\ NASDAQ also proposes to make non-substantive changes to
replace the term ``issuer'' with the defined term ``Company''
throughout the rules and to improve readability of the rule text.
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NASDAQ will implement these changes on January 1, 2014.\9\ A
foreign company that is not a Foreign Private Issuer will first owe the
$0.01 per share listing of additional shares fee for the change in
shares outstanding during its first fiscal quarter beginning on or
after January 1, 2014.\10\ A Foreign Private Issuer will be subject to
the new $7,500 fee for the change in its shares outstanding starting
with its first fiscal year beginning on or after January 1, 2014.\11\
Following effectiveness, if a company ceases to be a Foreign Private
Issuer, it will be assessed the listing of additional shares fee based
on its new status effective with the start of its next fiscal year,
when it is also required to start filing Forms 10-Q and 10-K.\12\ If a
company becomes a Foreign Private Issuer, it similarly will become
subject to the fee applicable to Foreign Private Issuers at the
beginning of its next fiscal year.
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\9\ Until January 1, 2014, the online NASDAQ rule book will
reflect the currently effective fees with a note indicating that
this fee change is pending and will become effective on January 1,
2014. The online NASDAQ rule book will also contain a link to the
text of the revised rule.
\10\ For example, a company with a December 31st year end would
first owe the fee under Rule 5910(b)(1) or Rule 5920(b)(1) for the
change in its shares outstanding during its first quarter, as
reflect [sic] in the difference between the shares outstanding
reported on its Form 10-K for the year ended December 31, 2013, and
its Form 10-Q for the quarter ended March 31, 2014.
\11\ A Foreign Private Issuer with a December 31st fiscal year
will first pay the new fee for shares issued between January 1, 2014
and December 31, 2014 and will be billed for those share issuances
based on the Form 20-F filed in 2015.
\12\ A foreign company is required to determine whether it is a
Foreign Private Issuer on an annual basis as of the end of its
second fiscal quarter. If the company determines that it is no
longer a Foreign Private Issuer, it must transition to domestic
reporting status beginning on the first day of the next fiscal year.
SEC Rule 3b-4(e), 17 CFR 240.3b-4(e).
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2. 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
Sections 6(b)(4) and (5) of the Act,\14\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees, and
other charges among its members, issuers and other persons using its
facilities, and does not unfairly discriminate between customers,
issuers, brokers or dealers.
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\13\ 15 U.S.C. 78f.
\14\ 15 U.S.C. 78f(b)(4) and (5).
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NASDAQ believes that the proposed fees are reasonable and not
unfairly discriminatory because they will better allocate costs of
NASDAQ's regulatory program across the listed companies that benefit
from that program. NASDAQ believes that the proposed $2,500 increase in
the listing of additional shares fee applicable to Foreign Private
Issuers is reasonable and an equitable allocation of a portion of the
costs of NASDAQ's regulatory program, which benefits these companies.
While the proposed $7,500 per year fee would exceed the $5,000 minimum
quarterly fee applicable to companies that are not Foreign Private
Issuers, NASDAQ believes that this higher fee is appropriate given that
Foreign Private Issuers are not subject to per share fees, which can
range as high as $65,000 per year. In addition, continuing a separate,
lower fee for Foreign Private Issuers remains a reasonable and
equitable allocation of fees because Foreign Private Issuers generally
trade on another marketplace and have exemptions available to many of
NASDAQ's governance rules,
[[Page 75633]]
including the shareholder approval and voting rights rules.
NASDAQ also believes that it is reasonable and not unfairly
discriminatory to charge a foreign company that is not a Foreign
Private Issuer the same fee as a domestic company. The listing
situation of a foreign company that is not a Foreign Private Issuer is
more similar to a domestic company than it is to a Foreign Private
Issuer in that a Foreign Private Issuer often will trade on another
marketplace and is subject to exemptions from many of NASDAQ's
corporate governance rules. On the other hand foreign companies that
are not Foreign Private Issuers, like domestic companies, do not
typically trade on other marketplaces and are not eligible to
exemptions from the governance requirements. Similarly, a Foreign
Private Issuer receives different treatment under the Commission's
rules than a foreign company that is not a Foreign Private Issuer.\15\
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\15\ For example, a Foreign Private Issuer is not required to
file quarterly reports and is exempt from the proxy rules. See SEC
Rules 13a-13(b)(2), 17 CFR 240.13a-13(b)(2), and 3a12-3(b), 17 CFR
240.3a12-3(b).
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Finally, NASDAQ believes that the proposed fees are consistent with
the investor protection objectives of Section 6(b)(5) of the Act \16\
in that they are designed to promote just and equitable principles of
trade, to remove impediments to a free and open market and national
market system, and in general to protect investors and the public
interest. Specifically, the fees are designed to ensure that there are
adequate resources for NASDAQ's listing compliance program, which helps
to assure that listing standards are properly enforced and investors
are protected.
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\16\ 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. The market for
listing services is extremely competitive and listed companies may
freely choose alternative venues based on the aggregate fees assessed,
and the value provided by each listing. This rule proposal does not
burden competition with other listing venues, which are similarly free
to set their fees. For these reasons, NASDAQ does not believe that the
proposed rule change will result in any burden on competition for
listings.
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \17\ and paragraph (f) of Rule 19b-4
thereunder.\18\ 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.
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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 17 CFR 240.19b-4(f).
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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-2013-134 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-2013-134. 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 the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2013-134 and should
be submitted on or before January 2, 2014
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\19\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-29619 Filed 12-11-13; 8:45 am]
BILLING CODE 8011-01-P