Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Granting Approval of Proposed Rule Change To Rule 5305 To Eliminate the Automatic Transfer of Companies From The NASDAQ Global Market to The NASDAQ Global Select Market, 51383-51385 [2014-20465]
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Federal Register / Vol. 79, No. 167 / Thursday, August 28, 2014 / Notices
how the Network Access Fee is
assessed, thereby removing
impediments to and perfecting the
mechanism of a free and open market
and a national market system, and, in
general, protect investors and the public
interest. The Exchange believes the
proposed rule change is reasonable
because the amount assessed for unicast
connectivity and multicast connectivity
to TPHs using 1 Gbps Network Access
Port(s) is the same. Additionally, the
Exchange believes this change is
equitable and not unfairly
discriminatory because it will apply to
all TPHs who use a 1 Gbps Network
Access Port equally. The Exchange
notes that whether a TPH receives
unicast and multicast connectivity via a
single 1 Gbps Network Access Port, two
separate 1 Gbps Network Access Ports
or two separate 10 Gbps Network Access
Ports, in each instance, the TPH would
be charged for each type of access
regardless of how many physical ports
they use.
Lastly, the Exchange believes it will
be beneficial to market participants to
make it explicitly clear that it is the
‘‘executing’’ CTPH that would be
rebated under the Clearing Trading
Permit Holder Position Re-Assignment
Rebate Program. The Exchange believes
this proposed rule change reduces
confusion as to which CTPHs are
entitled to a rebate under the Rebate
Program, thereby removing
impediments to and perfecting the
mechanism of a free and open market
and a national market system, and, in
general, protect investors and the public
interest.
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 that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed changes to alleviate confusion
are not intended for competitive reasons
and only apply to CBOE.
pmangrum on DSK3VPTVN1PROD with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
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)
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14:14 Aug 27, 2014
Jkt 232001
of the Act 11 and paragraph (f) of Rule
19b–4 12 thereunder. At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change 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–
CBOE–2014–065 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CBOE–2014–065. 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
11 15
12 17
PO 00000
U.S.C. 78s(b)(3)(A).
CFR. 240.19b–4(f).
Frm 00089
Fmt 4703
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51383
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–CBOE–
2014–065 and should be submitted on
or before September 18, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–20468 Filed 8–27–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72899; File No. SR–
NASDAQ–2014–067]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Order
Granting Approval of Proposed Rule
Change To Rule 5305 To Eliminate the
Automatic Transfer of Companies
From The NASDAQ Global Market to
The NASDAQ Global Select Market
August 22, 2014.
I. Introduction
On June 25, 2014, The NASDAQ
Stock Market LLC (‘‘NASDAQ’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend its rules in order to eliminate the
Exchange’s automatic annual review
and transfer of qualified companies
from The NASDAQ Global Market to
The NASDAQ Global Select Market. The
proposed rule change was published for
comment in the Federal Register on July
10, 2014.3 The Commission received no
comment letters regarding the proposed
rule change. This order approves the
proposed rule change.
II. Description of the Proposal
NASDAQ consists of three listing
tiers: The NASDAQ Global Select
Market (‘‘Global Select’’ or ‘‘Global
Select Market’’), The NASDAQ Global
Market (‘‘Global Market’’), and The
NASDAQ Capital Market (‘‘Capital
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 72538
(July 3, 2014), 79 FR 39446 (‘‘Notice’’).
1 15
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51384
Federal Register / Vol. 79, No. 167 / Thursday, August 28, 2014 / Notices
Market’’). Each tier has different listing
requirements; Capital Market has the
lowest quantitative criteria to qualify for
listing and Global Select has the highest
quantitative criteria to qualify for
listing. In its filing NASDAQ states that
the tiers were designed to appeal to
companies with different
characteristics.4 Currently, pursuant to
NASDAQ Rule 5305(b), NASDAQ
conducts an annual review of all Global
Market-listed companies’ qualifications
each year in November and December
based on data as of October 31, and
automatically places qualified Global
Market companies in the Global Select
tier the following January.5 While this
annual review currently occurs
automatically, a Global Market-listed
company also may apply to list on the
Global Select tier at any time.6
Companies transferring from the Global
Market to the Global Select Market,
whether as part of the annual review
process or upon their own application,
are not assessed entry or application
fees.7
The Exchange has proposed to
eliminate NASDAQ’s automatic annual
review and transfer of qualified
companies to the Global Select Market.
Under the proposal, NASDAQ would
review Global Market-listed companies
for transfer to the Global Select Market
only upon application by the company.
To effect this change, the Exchange has
proposed to delete the text of Rule
5305(b). According to the Exchange, the
reasons for the implementation of the
automatic annual review and transfer
process in 2006, when the Global Select
tier was created, are less relevant today,
and eliminating this process would
remove an unnecessary burden on
NASDAQ staff.8 NASDAQ proposes to
implement this change upon approval,
and states that it will notify Global
Market-listed companies about this
change via an email communication.9
As a result of the proposed rule
change, companies automatically
transferred in January 2014 would be
the last group automatically transferred
upon NASDAQ’s review under Rule
5305(b). A Global Market-listed
company could continue to apply for
transfer to the Global Select tier at any
point during the year by submitting a
pmangrum on DSK3VPTVN1PROD with NOTICES
4 See
listing application, and the review of an
application would continue to be
conducted without cost to the issuer.10
Qualified companies that apply could
transfer immediately upon confirmation
by NASDAQ staff that the company
meets the Global Select Market listing
requirements, and would not owe any
entry or other fees in connection with a
transfer from the Global Market to the
Global Select tier.11
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.12 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,13 which requires,
among other things, that the rules of a
national securities exchange be
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest; and
are not designed to permit unfair
discrimination between customers,
issuers, brokers or dealers.
As a result of the proposed rule
change, Global Market-listed companies
will have to monitor whether they
qualify for transfer to the Global Select
Market and submit an application for
listing on the Global Select Market,
rather than rely on the Exchange’s
automatic review and transfer process.
The Commission observes that this
could create an additional burden for
Global Market-listed issuers that would
otherwise rely on the Exchange’s
automatic process for transfer to the
Global Select tier. The Exchange
acknowledges this burden, but believes
that, on balance, it is not significant
enough to warrant continuing the
automatic transfer process, which places
a burden on NASDAQ staff that the
Exchange believes is unnecessary.14 The
Exchange notes that much of the
information required for the application
is pre-populated for a company, and
Notice, 79 FR at 39446.
5 Id.
10 Id.
6 Id.
11 Id.
7 Id.
8 Id. at 39446–47. NASDAQ notes that 228
securities transferred to the Global Select Market in
January 2011 based on NASDAQ’s automatic
review, and between 58 and 77 securities
transferred in each subsequent year. Id. at 39446
n.5.
9 Id. at 39446.
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14:14 Aug 27, 2014
Jkt 232001
at 39446–47. The Commission also notes
that annual fees for continued listing are the same
for the Global Market and Global Select tiers.
12 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
13 15 U.S.C. 78f(b)(5).
14 See Notice, 79 FR at 39446–47.
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
asserts that, given the ease of the
application process, it would continue
to be simple for qualified companies to
request review at any time and without
cost.15
Balancing the apparent simplicity of
the application process and the fact that
Global Market-listed companies may
apply for a transfer to the Global Select
tier at any time and with no charge from
NASDAQ against the unnecessary
burden that NASDAQ asserts is placed
on its staff by the automatic review and
transfer process, the Commission
believes that the proposed rule change
is reasonable and consistent with
Section 6(b)(5) of the Act in that it
promotes just and equitable principles
of trade, protects investors and the
public interest, and is not designed to
permit unfair discrimination between
issuers. Under the proposal, a Global
Market-listed company that is unsure of
its status could continue to submit an
application and request review of its
qualifications at any time during the
year through what appears to be a
relatively simple application process,
and with no charge or additional fees
imposed by NASDAQ.16 While the
Commission expects that companies
would monitor their listing
qualifications, even a company that
performs little or no such monitoring
could obtain a review of its
qualifications from NASDAQ at any
time and potentially transfer to the
Global Select tier with apparent ease.
As noted above, the automatic review
process was developed at the inception
of the Global Select tier to notify
companies about their eligibility for that
tier, which was, at that time, new and
unfamiliar to them. As a result, the
Commission notes that the automatic
review process provided a mechanism
for NASDAQ to promote, market, and
expand the new Global Select tier to
eligible companies. Now that companies
are familiar with this process and also
have an easy way to apply throughout
the year, the Commission believes that
it is consistent with the Act, and Section
6(b)(5) in particular, for NASDAQ no
longer to offer this service to promote its
Global Select tier. In addition, the
Commission notes that it received no
comments on the proposal, and thus is
not aware of any objection to it from
15 Id. at 39446. The Exchange states that the
application to transfer from the Global Market to the
Global Select Market is available on its Web site,
completed online and pre-populated with the
company’s identifying information based on its
symbol and CIK code or CUSIP number. The listed
company generally will only need to provide
contact information, affirm the accuracy of the
information in the application, and accept the
Listing Agreement. Id. at n. 6.
16 See supra note 11.
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Federal Register / Vol. 79, No. 167 / Thursday, August 28, 2014 / Notices
interested parties, in particular, Global
Market-listed companies. Moreover,
eliminating the automatic review
process, which NASDAQ has stated is a
burden on its staff, could free up
additional resources that may be better
used for the regulation and oversight of
listed companies.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,17 that the
proposed rule change (SR–NASDAQ–
2014–067) be, and it hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–20465 Filed 8–27–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72902; File No. SR–C2–
2014–018]
Self-Regulatory Organizations; C2
Options Exchange, Incorporated;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend the Fees Schedule
August 22, 2014.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on August
12, 2014, C2 Options Exchange,
Incorporated (the ‘‘Exchange’’ or ‘‘C2’’)
filed with the Securities and Exchange
Commission (the ‘‘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.
pmangrum on DSK3VPTVN1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
C2 proposes to make technical
amendments to the C2 rules. The text of
the proposed rule change is available on
the Exchange’s Web site (https://
www.c2exchange.com/Legal/), at the
Exchange’s Office of the Secretary, and
at the Commission’s Public Reference
Room.
17 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
18 17
VerDate Mar<15>2010
14:14 Aug 27, 2014
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 for, Proposed Rule Change
1. Purpose
The Exchange proposes to amend its
Fees Schedule. First, the Exchange
proposes to amend a sentence in its Fees
Schedule that reads: ‘‘After three
months, all fees as assessed by the
Exchange are considered final by the
Exchange.’’ The purpose of this
statement is to encourage Permit
Holders to promptly review their
Exchange invoices so that any disputed
charges can be addressed in a timely
manner. The Exchange notes that this
sentence is not intended to preclude the
Exchange from assessing fees more than
three months after they were incurred.
Indeed, the Exchange is required to
enforce compliance by its Permit
Holders and persons associated with its
Permit Holders the rules of the
Exchange, including its Fees Schedule.3
As such, the Exchange must ensure that
it assesses the fees set forth in its Fees
Schedule so long as the fee(s) were
required to be paid pursuant to the C2
Fees Schedule in effect at the time the
fees were incurred, even if the Exchange
must assess the fees more than three
months after they have been incurred.
The Exchange believes it would be
beneficial to make this clear in the Fees
Schedule and provide further clarifying
language regarding the finality of fees.
Specifically, the Exchange seeks to
amend this sentence to state ‘‘Any
potential billing errors relating to fees
assessed by C2 must be brought to the
attention of C2’s Accounting
Department within three months from
the invoice date. All fees assessed shall
be deemed final and non-refundable
after three months from the invoice. The
Exchange is not precluded from
assessing fees more than three months
after they were incurred if those fees
were required to be paid pursuant to the
3 15
Jkt 232001
PO 00000
U.S.C. 78f(b)(1).
Frm 00091
Fmt 4703
Sfmt 4703
51385
C2 Fees Schedule in effect at the time
the fees were incurred.’’ The Exchange
notes that this has always been the case,
and the clarification is simply reflecting
how the current language of the C2 Fees
Schedule applies. The Exchange also
notes that its practice is to assess fees in
a timely manner at the time such fees
are incurred. However, the Exchange
requires the ability to assess any fee
upon discovering an error regardless of
how much time has passed since the fee
was incurred.
The Exchange next proposes to make
an amendment to the Connectivity
Charges table. Currently, the Exchange
charges Permit Holders a $500 per
month Network Access Port fee for 1gigabit (‘‘1 Gbps’’) network access
connectivity and $1,000 per month for
10 Gbps network connectivity. The
Network Access Ports provide direct
access to C2’s trading system. Network
Access Ports are used to receive unicast
(i.e., orders and quotes) and multicast
(i.e., market data) traffic. The Exchange
notes that a 1 Gbps port may receive
both unicast and multicast traffic,
whereas a 10 Gbps port may only
receive either multicast or unicast
traffic. The Exchange seeks to clarify
that the Network Access Port fee is
assessed separately for unicast and
multicast connectivity. Accordingly, if a
Permit Holder has 1 Gbps connectivity
and receives both unicast and multicast
traffic through a single port, the Permit
Holder would be charged $1,000 dollars
per month (i.e., $500 per month for
unicast connectivity and $500 per
month for multicast connectivity).
Similarly, if a Permit Holder has one 1
Gbps Network Access Port for unicast
connectivity only and another 1 Gbps
Network Access Port for multicast
connectivity only, the Permit Holder
would be charged $1,000 dollars per
month (i.e. $500 per month for each
port). As noted above, a single 10-Gbps
Network Access Port cannot receive
both unicast and multicast traffic.
Accordingly, if a Permit Holder wants a
10 Gbps connection, in order to receive
both traffic types the Permit Holder
would need to purchase two 10 Gbps
Network Access Ports (i.e., one to be
used for multicast connectivity and one
to be used for unicast activity) and
would therefore be charged $2,000 per
month (i.e., $1,000 per month for each
port).
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
E:\FR\FM\28AUN1.SGM
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Agencies
[Federal Register Volume 79, Number 167 (Thursday, August 28, 2014)]
[Notices]
[Pages 51383-51385]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-20465]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72899; File No. SR-NASDAQ-2014-067]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Granting Approval of Proposed Rule Change To Rule 5305 To Eliminate the
Automatic Transfer of Companies From The NASDAQ Global Market to The
NASDAQ Global Select Market
August 22, 2014.
I. Introduction
On June 25, 2014, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend its rules in order to eliminate the
Exchange's automatic annual review and transfer of qualified companies
from The NASDAQ Global Market to The NASDAQ Global Select Market. The
proposed rule change was published for comment in the Federal Register
on July 10, 2014.\3\ The Commission received no comment letters
regarding the proposed rule change. This order approves the proposed
rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 72538 (July 3,
2014), 79 FR 39446 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposal
NASDAQ consists of three listing tiers: The NASDAQ Global Select
Market (``Global Select'' or ``Global Select Market''), The NASDAQ
Global Market (``Global Market''), and The NASDAQ Capital Market
(``Capital
[[Page 51384]]
Market''). Each tier has different listing requirements; Capital Market
has the lowest quantitative criteria to qualify for listing and Global
Select has the highest quantitative criteria to qualify for listing. In
its filing NASDAQ states that the tiers were designed to appeal to
companies with different characteristics.\4\ Currently, pursuant to
NASDAQ Rule 5305(b), NASDAQ conducts an annual review of all Global
Market-listed companies' qualifications each year in November and
December based on data as of October 31, and automatically places
qualified Global Market companies in the Global Select tier the
following January.\5\ While this annual review currently occurs
automatically, a Global Market-listed company also may apply to list on
the Global Select tier at any time.\6\ Companies transferring from the
Global Market to the Global Select Market, whether as part of the
annual review process or upon their own application, are not assessed
entry or application fees.\7\
---------------------------------------------------------------------------
\4\ See Notice, 79 FR at 39446.
\5\ Id.
\6\ Id.
\7\ Id.
---------------------------------------------------------------------------
The Exchange has proposed to eliminate NASDAQ's automatic annual
review and transfer of qualified companies to the Global Select Market.
Under the proposal, NASDAQ would review Global Market-listed companies
for transfer to the Global Select Market only upon application by the
company. To effect this change, the Exchange has proposed to delete the
text of Rule 5305(b). According to the Exchange, the reasons for the
implementation of the automatic annual review and transfer process in
2006, when the Global Select tier was created, are less relevant today,
and eliminating this process would remove an unnecessary burden on
NASDAQ staff.\8\ NASDAQ proposes to implement this change upon
approval, and states that it will notify Global Market-listed companies
about this change via an email communication.\9\
---------------------------------------------------------------------------
\8\ Id. at 39446-47. NASDAQ notes that 228 securities
transferred to the Global Select Market in January 2011 based on
NASDAQ's automatic review, and between 58 and 77 securities
transferred in each subsequent year. Id. at 39446 n.5.
\9\ Id. at 39446.
---------------------------------------------------------------------------
As a result of the proposed rule change, companies automatically
transferred in January 2014 would be the last group automatically
transferred upon NASDAQ's review under Rule 5305(b). A Global Market-
listed company could continue to apply for transfer to the Global
Select tier at any point during the year by submitting a listing
application, and the review of an application would continue to be
conducted without cost to the issuer.\10\ Qualified companies that
apply could transfer immediately upon confirmation by NASDAQ staff that
the company meets the Global Select Market listing requirements, and
would not owe any entry or other fees in connection with a transfer
from the Global Market to the Global Select tier.\11\
---------------------------------------------------------------------------
\10\ Id.
\11\ Id. at 39446-47. The Commission also notes that annual fees
for continued listing are the same for the Global Market and Global
Select tiers.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\12\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\13\ which
requires, among other things, that the rules of a national securities
exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, to protect investors and the
public interest; and are not designed to permit unfair discrimination
between customers, issuers, brokers or dealers.
---------------------------------------------------------------------------
\12\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
As a result of the proposed rule change, Global Market-listed
companies will have to monitor whether they qualify for transfer to the
Global Select Market and submit an application for listing on the
Global Select Market, rather than rely on the Exchange's automatic
review and transfer process. The Commission observes that this could
create an additional burden for Global Market-listed issuers that would
otherwise rely on the Exchange's automatic process for transfer to the
Global Select tier. The Exchange acknowledges this burden, but believes
that, on balance, it is not significant enough to warrant continuing
the automatic transfer process, which places a burden on NASDAQ staff
that the Exchange believes is unnecessary.\14\ The Exchange notes that
much of the information required for the application is pre-populated
for a company, and asserts that, given the ease of the application
process, it would continue to be simple for qualified companies to
request review at any time and without cost.\15\
---------------------------------------------------------------------------
\14\ See Notice, 79 FR at 39446-47.
\15\ Id. at 39446. The Exchange states that the application to
transfer from the Global Market to the Global Select Market is
available on its Web site, completed online and pre-populated with
the company's identifying information based on its symbol and CIK
code or CUSIP number. The listed company generally will only need to
provide contact information, affirm the accuracy of the information
in the application, and accept the Listing Agreement. Id. at n. 6.
---------------------------------------------------------------------------
Balancing the apparent simplicity of the application process and
the fact that Global Market-listed companies may apply for a transfer
to the Global Select tier at any time and with no charge from NASDAQ
against the unnecessary burden that NASDAQ asserts is placed on its
staff by the automatic review and transfer process, the Commission
believes that the proposed rule change is reasonable and consistent
with Section 6(b)(5) of the Act in that it promotes just and equitable
principles of trade, protects investors and the public interest, and is
not designed to permit unfair discrimination between issuers. Under the
proposal, a Global Market-listed company that is unsure of its status
could continue to submit an application and request review of its
qualifications at any time during the year through what appears to be a
relatively simple application process, and with no charge or additional
fees imposed by NASDAQ.\16\ While the Commission expects that companies
would monitor their listing qualifications, even a company that
performs little or no such monitoring could obtain a review of its
qualifications from NASDAQ at any time and potentially transfer to the
Global Select tier with apparent ease.
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\16\ See supra note 11.
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As noted above, the automatic review process was developed at the
inception of the Global Select tier to notify companies about their
eligibility for that tier, which was, at that time, new and unfamiliar
to them. As a result, the Commission notes that the automatic review
process provided a mechanism for NASDAQ to promote, market, and expand
the new Global Select tier to eligible companies. Now that companies
are familiar with this process and also have an easy way to apply
throughout the year, the Commission believes that it is consistent with
the Act, and Section 6(b)(5) in particular, for NASDAQ no longer to
offer this service to promote its Global Select tier. In addition, the
Commission notes that it received no comments on the proposal, and thus
is not aware of any objection to it from
[[Page 51385]]
interested parties, in particular, Global Market-listed companies.
Moreover, eliminating the automatic review process, which NASDAQ has
stated is a burden on its staff, could free up additional resources
that may be better used for the regulation and oversight of listed
companies.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\17\ that the proposed rule change (SR-NASDAQ-2014-067) be, and it
hereby is, approved.
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\17\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-20465 Filed 8-27-14; 8:45 am]
BILLING CODE 8011-01-P