Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Granting Approval of Proposed Rule Change To Require That a Company Publicly Disclose the Denial of a Listing Application, 9285-9286 [2015-03518]
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Federal Register / Vol. 80, No. 34 / Friday, February 20, 2015 / Notices
and regulations thereunder,6 and, in
particular, Section 11A(a)(1) of the Act 7
and Rule 608 thereunder 8 in that it is
necessary or appropriate in the public
interest, for the protection of investors
and the maintenance of fair and orderly
markets, to remove impediments to, and
perfect the mechanisms of, a national
market system.
The proposal is consistent with
Section 11A(a)(1)(C)(iii) of the Act,9
which sets forth Congress’ finding that
it is in the public interest and
appropriate for the protection of
investors and the maintenance of fair
and orderly markets to assure the
availability to brokers, dealers, and
investors of information with respect to
quotations and transactions in
securities. These goals are furthered by
the proposed changes requiring that
Participants report trades as soon as
practicable, but no later than 10
seconds, following execution (or
cancellation, as applicable) as they bring
the trade reporting requirement more in
line with current industry practice, as
the markets have become more
automated and more efficient. In
addition, the change will make the trade
reporting requirement consistent across
the two transaction reporting plans for
equity securities 10 and FINRA.11
IV. Conclusion
TKELLEY on DSK3SPTVN1PROD with NOTICES
It is therefore ordered, pursuant to
Section 11A of the Act,12 and the rules
thereunder, that the proposed
Amendment to the CTA Plan (File No.
SR–CTA–2014–04) is approved.
6 The Commission has considered the proposed
amendment’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
7 15 U.S.C. 78k–1(a)(1).
8 17 CFR 240.608.
9 15 U.S.C. 78k–1(a)(1)(C)(iii).
10 The participants of the Joint Self-Regulatory
Organization Plan Governing the Collection,
Consolidation and Dissemination of Quotation and
Transaction Information for Nasdaq-Listed
Securities Traded on Exchanges on an Unlisted
Trading Privileges Basis (‘‘Nasdaq/UTP Plan’’) also
proposed to amend the trade reporting requirement
under the Nasdaq/UTP Plan to require that
transactions be reported as soon as practicable, but
no later than 10 seconds following execution. See
Securities Exchange Act Release No. 73970
(December 31, 2014), 80 FR 910 (January 7, 2015)
(File No. S7–24–89) (Notice of Filing of
Amendment No. 34 to the Nasdaq/UTP Plan).
11 See Securities Exchange Act Release No. 69561
(May 13, 2013), 78 FR 29190 (May 17, 2013) (File
No. SR–FINRA–2013–013) (order approving FINRA
rule to require FINRA members to report over-thecounter transactions in Eligible Securities to FINRA
as soon as practicable, but no later than 10 seconds
following execution).
12 15 U.S.C. 78k–1.
13 17 CFR 200.30–3(a)(27).
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Brent J. Fields,
Secretary.
[FR Doc. 2015–03521 Filed 2–19–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74279; File No. SR–
NASDAQ–2014–102]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Order
Granting Approval of Proposed Rule
Change To Require That a Company
Publicly Disclose the Denial of a
Listing Application
February 13, 2015.
I. Introduction
On December 11, 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
require companies to disclose the denial
of an initial listing application. The
proposed rule change was published for
comment in the Federal Register on
December 30, 2014.3 The Commission
received no comments on the proposed
rule change. This order approves the
proposed rule change.
II. Description of Proposed Rule Change
In its filing, Nasdaq stated that it
processes between 200 and 300
applications each year from companies
seeking to list securities on Nasdaq.
According to the Exchange, while most
applicants meet the listing requirements
(or are prepared to take action to meet
those requirements before listing) in
some cases a company does not meet
the requirements and is not willing, or
able, to comply. Nasdaq may also deny
a listing application based on public
interest concerns even though the
company meets all quantitative listing
requirements.4 In either case, Nasdaq
will inform the company of the
outcome, and the company may
withdraw its application before the
application is formally denied. If the
company does not withdraw its
application, then the Nasdaq Listing
Qualifications Department will issue a
written denial to the company.5 A
company denied listing on Nasdaq may
appeal the denial to a Listing
Qualifications Hearings Panel
(‘‘Hearings Panel’’).6
According to Nasdaq, investors view
a company’s decision to seek initial
listing on the Exchange as a positive
development, and companies often
publicize their intention to apply for
listing.7 Nasdaq believes that the public
is therefore interested in the outcome of
an application for initial listing. Nasdaq
proposes to require that a company that
receives a written determination
denying its application for listing must,
within four business days, make a
public announcement in a press release
or other Regulation FD compliant
manner about the receipt of the
determination and the Nasdaq Rule(s)
upon which the determination is based.
The company must describe each
specific basis and concern identified by
Nasdaq in reaching the determination. If
the public announcement is not made
by the company within the time allotted
or does not include all of the required
information, Nasdaq will make a public
announcement with the required
information and, if the company appeals
the determination as set forth in Nasdaq
Rule 5815, the Hearings Panel will
consider the company’s failure to make
the public announcement in considering
whether to list the company. Nasdaq
also proposes to clarify in Rule 5205
that a company may withdraw its
application for initial listing at any time.
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.8 In particular, the
Commission finds that the proposed
rule change is consistent with section
6(b)(5) of the Act,9 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
5 See
Nasdaq Rule 5810.
Nasdaq Rule 5815.
7 See Notice, supra note 3.
8 In approving this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
9 15 U.S.C. 78f(b)(5).
6 See
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 73912
(December 22, 2014), 79 FR 78540 (December 30,
2014) (‘‘Notice’’).
4 See Nasdaq Rule 5101 and 5101–1.
2 17
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Federal Register / Vol. 80, No. 34 / Friday, February 20, 2015 / Notices
investors and the public interest and are
not designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Commission notes that full and
fair disclosure of information by
companies is of critical importance to
financial markets and the investing
public. According to the Exchange,
investors view a company’s decision to
seek initial listing on the Exchange as a
positive development, and companies
often publicize their intention to apply
for listing. The listing of a company on
a national securities exchange such as
Nasdaq provides benefits including,
among others, potential for increased
stock liquidity and capital raising
benefits.10 However, there appears to be
no Exchange requirement for the
company to publicize when its listing
application has been denied and
therefore that the company will not be
receiving the benefits of an exchange
listing.
The Commission believes that the
public, including potential future
investors, would find a denial of a
company’s listing application, just as
important as the decision to seek an
exchange listing which, as noted by
Nasdaq, is often publicized. The
significance of a denial of listing is also
underscored by the existence of both the
right to appeal the denial on Nasdaq and
the right to obtain Commission review
of such appeals. Nasdaq rules provide,
as noted above, for due process to
appeal a denial of listing.11 Denial of
listings have also been subject to
Commission review under section 19(d)
of the Exchange Act.12
The Commission therefore believes
that the proposed rule change will help
provide transparency to future, as well
as existing, investors about the status of
a company’s listing application. The
Commission also believes that Nasdaq’s
proposal to require that such disclosure
be made by press release, or other
Regulation FD compliant manner, will
permit companies to disseminate this
important information to the public in
a broad and inclusive manner and
should help to ensure for broad public
access to the denial of listing
TKELLEY on DSK3SPTVN1PROD with NOTICES
10 Section
18 of the Securities Act of 1933
(‘‘Securities Act’’) provides federal preemption of
state blue sky laws for securities listed on certain
national securities exchanges. 15 U.S.C. 77r. See
also 17 CFR 230.146.
11 These appeal provisions have been adopted in
accordance with section 6(b)(7) of the Act. 15 U.S.C.
78f(b)(7).
12 Section 19(d) of the Act provides, among other
things, for Commission review of any action selfregulatory organization that, among other things,
prohibits or limits any person in respect to access
to service offered by such organization. See U.S.C.
78s(d).
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17:07 Feb 19, 2015
Jkt 235001
determination and the reasons for the
denial.
As described above, the proposal will
also clarify in Nasdaq’s rules that a
company may withdraw its application
for initial listing at any time during the
review process.13 The decision to seek
listing and submit a listing application
is generally a voluntary decision by a
company. Consistent with this, it is our
understanding that companies seeking
listing on Nasdaq are allowed to
withdraw their voluntary application at
any time during the process. The
clarification in Nasdaq’s proposal
codifies this concept in Nasdaq’s rules.
The Commission also believes that for,
the same reasons noted above,
companies should consider any
applicable disclosure requirements
under the federal securities laws if a
company withdraws its listing
application with Nasdaq for any reason.
IV. Conclusion
It is therefore ordered pursuant to
section 19(b)(2) of the Act,14 that the
proposed rule change (SR–NASDAQ–
2014–102) be, and it hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015–03518 Filed 2–19–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74270; File No. SR–NSX–
2014–017]
Self-Regulatory Organizations;
National Stock Exchange, Inc.; Order
Granting Approval of Proposed Rule
Change in Connection With a
Proposed Transaction in Which
National Stock Exchange Holdings,
Inc. Will Acquire Ownership of the
Exchange From the CBOE Stock
Exchange, LLC
February 13, 2015.
I. Introduction
On December 16, 2014, National
Stock Exchange, Inc. (‘‘NSX’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to section
19(b)(1) 1 of the Securities Exchange Act
13 See
Notice, supra note 3.
U.S.C. 78s(b)(2).
15 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
14 15
PO 00000
Frm 00027
Fmt 4703
Sfmt 4703
of 1934 (‘‘Act’’),2 and Rule 19b–4
thereunder,3 a proposed rule change to
make certain amendments to its
corporate governance documents in
order to effectuate a proposed
transaction (the ‘‘Transaction’’) in
which the Exchange will become a
wholly-owned subsidiary of National
Stock Exchange Holdings, Inc., a
Delaware corporation (‘‘NSX
Holdings’’). The proposed rule change
was published for comment in the
Federal Register on January 2, 2015.4
The Commission received no comments
on the proposal.
The Commission has reviewed
carefully the proposed rule change and
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.5 In particular, the
Commission finds that the proposed
rule change is consistent with sections
6(b)(1) and (3) of the Act,6 which,
among other things, require a national
securities exchange to be so organized
and have the capacity to be able to carry
out the purposes of the Act, and to
enforce compliance by its members and
persons associated with its members
with the provisions of the Act, the rules
and regulations thereunder, and the
rules of the exchange, and assure the
fair representation of its members in the
selection of its directors and
administration of its affairs, and provide
that one or more directors shall be
representative of issuers and investors
and not be associated with a member of
the exchange, broker, or dealer. The
Commission also finds that the proposal
is consistent with section 6(b)(5) of the
Act,7 which requires that the rules of the
exchange be 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.
II. Discussion
A. Corporate Structure and Proposed
Transaction
Currently, the Exchange is a whollyowned subsidiary of the CBOE Stock
2 15
U.S.C. 78a.
CFR 240.19b–4.
4 See Securities Exchange Act Release No. 73944
(December 24, 2014), 80 FR 85 (SR–NSX–2014–017)
(‘‘Notice’’).
5 In approving the proposed rule change, the
Commission has considered its impact on
efficiency, competition and capital formation. See
15 U.S.C. 78c(f).
6 15 U.S.C. 78f(b)(1) and (b)(3).
7 15 U.S.C. 78f(b)(5).
3 17
E:\FR\FM\20FEN1.SGM
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]]>Agencies
[Federal Register Volume 80, Number 34 (Friday, February 20, 2015)]
[Notices]
[Pages 9285-9286]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-03518]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74279; File No. SR-NASDAQ-2014-102]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Granting Approval of Proposed Rule Change To Require That a Company
Publicly Disclose the Denial of a Listing Application
February 13, 2015.
I. Introduction
On December 11, 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 require companies to disclose the denial of an
initial listing application. The proposed rule change was published for
comment in the Federal Register on December 30, 2014.\3\ The Commission
received no comments on 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. 73912 (December 22,
2014), 79 FR 78540 (December 30, 2014) (``Notice'').
---------------------------------------------------------------------------
II. Description of Proposed Rule Change
In its filing, Nasdaq stated that it processes between 200 and 300
applications each year from companies seeking to list securities on
Nasdaq. According to the Exchange, while most applicants meet the
listing requirements (or are prepared to take action to meet those
requirements before listing) in some cases a company does not meet the
requirements and is not willing, or able, to comply. Nasdaq may also
deny a listing application based on public interest concerns even
though the company meets all quantitative listing requirements.\4\ In
either case, Nasdaq will inform the company of the outcome, and the
company may withdraw its application before the application is formally
denied. If the company does not withdraw its application, then the
Nasdaq Listing Qualifications Department will issue a written denial to
the company.\5\ A company denied listing on Nasdaq may appeal the
denial to a Listing Qualifications Hearings Panel (``Hearings
Panel'').\6\
---------------------------------------------------------------------------
\4\ See Nasdaq Rule 5101 and 5101-1.
\5\ See Nasdaq Rule 5810.
\6\ See Nasdaq Rule 5815.
---------------------------------------------------------------------------
According to Nasdaq, investors view a company's decision to seek
initial listing on the Exchange as a positive development, and
companies often publicize their intention to apply for listing.\7\
Nasdaq believes that the public is therefore interested in the outcome
of an application for initial listing. Nasdaq proposes to require that
a company that receives a written determination denying its application
for listing must, within four business days, make a public announcement
in a press release or other Regulation FD compliant manner about the
receipt of the determination and the Nasdaq Rule(s) upon which the
determination is based. The company must describe each specific basis
and concern identified by Nasdaq in reaching the determination. If the
public announcement is not made by the company within the time allotted
or does not include all of the required information, Nasdaq will make a
public announcement with the required information and, if the company
appeals the determination as set forth in Nasdaq Rule 5815, the
Hearings Panel will consider the company's failure to make the public
announcement in considering whether to list the company. Nasdaq also
proposes to clarify in Rule 5205 that a company may withdraw its
application for initial listing at any time.
---------------------------------------------------------------------------
\7\ See Notice, supra note 3.
---------------------------------------------------------------------------
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.\8\
In particular, the Commission finds that the proposed rule change is
consistent with section 6(b)(5) of the Act,\9\ 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
[[Page 9286]]
investors and the public interest and are not designed to permit unfair
discrimination between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\8\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission notes that full and fair disclosure of information
by companies is of critical importance to financial markets and the
investing public. According to the Exchange, investors view a company's
decision to seek initial listing on the Exchange as a positive
development, and companies often publicize their intention to apply for
listing. The listing of a company on a national securities exchange
such as Nasdaq provides benefits including, among others, potential for
increased stock liquidity and capital raising benefits.\10\ However,
there appears to be no Exchange requirement for the company to
publicize when its listing application has been denied and therefore
that the company will not be receiving the benefits of an exchange
listing.
---------------------------------------------------------------------------
\10\ Section 18 of the Securities Act of 1933 (``Securities
Act'') provides federal preemption of state blue sky laws for
securities listed on certain national securities exchanges. 15
U.S.C. 77r. See also 17 CFR 230.146.
---------------------------------------------------------------------------
The Commission believes that the public, including potential future
investors, would find a denial of a company's listing application, just
as important as the decision to seek an exchange listing which, as
noted by Nasdaq, is often publicized. The significance of a denial of
listing is also underscored by the existence of both the right to
appeal the denial on Nasdaq and the right to obtain Commission review
of such appeals. Nasdaq rules provide, as noted above, for due process
to appeal a denial of listing.\11\ Denial of listings have also been
subject to Commission review under section 19(d) of the Exchange
Act.\12\
---------------------------------------------------------------------------
\11\ These appeal provisions have been adopted in accordance
with section 6(b)(7) of the Act. 15 U.S.C. 78f(b)(7).
\12\ Section 19(d) of the Act provides, among other things, for
Commission review of any action self-regulatory organization that,
among other things, prohibits or limits any person in respect to
access to service offered by such organization. See U.S.C. 78s(d).
---------------------------------------------------------------------------
The Commission therefore believes that the proposed rule change
will help provide transparency to future, as well as existing,
investors about the status of a company's listing application. The
Commission also believes that Nasdaq's proposal to require that such
disclosure be made by press release, or other Regulation FD compliant
manner, will permit companies to disseminate this important information
to the public in a broad and inclusive manner and should help to ensure
for broad public access to the denial of listing determination and the
reasons for the denial.
As described above, the proposal will also clarify in Nasdaq's
rules that a company may withdraw its application for initial listing
at any time during the review process.\13\ The decision to seek listing
and submit a listing application is generally a voluntary decision by a
company. Consistent with this, it is our understanding that companies
seeking listing on Nasdaq are allowed to withdraw their voluntary
application at any time during the process. The clarification in
Nasdaq's proposal codifies this concept in Nasdaq's rules. The
Commission also believes that for, the same reasons noted above,
companies should consider any applicable disclosure requirements under
the federal securities laws if a company withdraws its listing
application with Nasdaq for any reason.
---------------------------------------------------------------------------
\13\ See Notice, supra note 3.
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered pursuant to section 19(b)(2) of the
Act,\14\ that the proposed rule change (SR-NASDAQ-2014-102) be, and it
hereby is, approved.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(2).
\15\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-03518 Filed 2-19-15; 8:45 am]
BILLING CODE 8011-01-P
