Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend Nasdaq's Program Providing Eligible Companies With Complimentary Board Recruiting Services, 63113-63115 [2022-22555]

Download as PDF Federal Register / Vol. 87, No. 200 / Tuesday, October 18, 2022 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96042; File No. SR– NASDAQ–2022–055] 1. Purpose Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend Nasdaq’s Program Providing Eligible Companies With Complimentary Board Recruiting Services October 12, 2022. 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 October 4, 2022, The Nasdaq Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend Nasdaq’s program providing Eligible Companies with complimentary board recruiting services. The text of the proposed rule change is available on the Exchange’s website at https://listingcenter.nasdaq.com/ rulebook/nasdaq/rules, at the principal office of the Exchange, and at the Commission’s Public Reference Room. khammond on DSKJM1Z7X2PROD with NOTICES 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. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 19:52 Oct 17, 2022 Jkt 259001 Nasdaq is proposing to extend its program, described in IM–5900–9, providing Eligible Companies 3 with complimentary board recruiting services. The rule currently requires Eligible Companies to request services by December 1, 2022; as revised that deadline would be extended to December 1, 2023. Nasdaq also proposes to make clarifying changes to reflect the approval of Rule 5605(f). Under IM–5900–9,4 Nasdaq provides Eligible Companies with one year of complimentary access for two users to a board recruiting service, which provides access to a network of board-ready diverse candidates for companies to identify and evaluate. Nasdaq believes that offering this board recruiting solution assists and encourages listed companies to increase diverse representation on their boards, which can result in improved corporate governance, thus strengthening the 3 Under Nasdaq Rule IM–5900–9, an Eligible Company is: (a) any listed Company, except as described below, that represents to Nasdaq that it does not have (i) at least one director who self-identifies as female; and (ii) at least one director who selfidentifies as one or more of the following: Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, or Two or More Races or Ethnicities, or who self-identifies as lesbian, gay, bisexual, transgender or as a member of the queer community; (b) a listed Company that (i) is a Foreign Private Issuer (as defined in Rule 5005(a)(19), or (ii) is considered a foreign issuer under Rule 3b–4(b) under the Act and has its principal executive offices located outside of the United States, if it represents to Nasdaq that it does not have (i) at least one director who self-identifies as female; and (ii) at least one director who self-identifies as one or more of the following: female, an underrepresented individual based on national, racial, ethnic, indigenous, cultural, religious or linguistic identity in the country of the company’s principal executive offices, or lesbian, gay, bisexual, transgender or as a member of the queer community; or (c) a listed Company that is a Smaller Reporting Company (as defined in Rule 12b–2 under the Act), if it represents to Nasdaq that it does not have (i) at least one director who self-identifies as female, and (ii) at least one director who self-identifies as one or more of the following: female, Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, or Two or More Races or Ethnicities, or who self-identifies as lesbian, gay, bisexual, transgender or as a member of the queer community. 4 Securities Exchange Act Release No. 92590 (August 6, 2021), 86 FR 44424 (August 12, 2021) (SR–NASDAQ–2020–082). PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 63113 integrity of the market and building investor confidence. Currently, Eligible Companies may request the board recruiting complimentary service on or before December 1, 2022. After evaluating the service and progress made in enhancing diversity, Nasdaq proposes to extend the program until December 1, 2023. Under Nasdaq Rule 5605(f)(7), the earliest that a Nasdaq listed company will need to explain why it does not have at least one Diverse 5 director, is August 6, 2023; and the earliest it will have to explain why it does not have at least two Diverse directors is August 6, 2025.6 As such, Nasdaq believes it continues to be appropriate to offer the complimentary board recruiting service to Eligible Companies. In addition, Nasdaq proposes to update the reference in Nasdaq Rule IM–5900–9 to Nasdaq’s proposed rule contained in SR–Nasdaq–2020–081, as it pertains to the Diverse Board Representation, to instead reference the approved Nasdaq Rule 5605(f). This change is non-substantive, and clarifies the rules. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,7 in general, and furthers the objectives of Section 6(b)(5) of the Act,8 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest. It is also consistent with this provision because it is not designed to permit unfair discrimination between issuers. Nasdaq also believes that the proposed rule change is consistent with the provisions of Sections 6(b)(4) 9 and 6(b)(8),10 in that the proposal is designed, among other things, to provide for the equitable allocation of reasonable dues, fees, and other charges among Exchange members and issuers and other persons using its facilities and that the rules of the Exchange do not impose any burden on competition not 5 Nasdaq Rule 5605(f)(1) provides the definition of ‘‘Diverse’’. ‘‘Diverse’’ means an individual who self-identifies in one or more of the following categories: Female, Underrepresented Minority, or LGBTQ+. ‘‘Female’’ means an individual who selfidentifies her gender as a woman, without regard to the individual’s designated sex at birth. 6 Nasdaq Rule 5065(f)(7)(A). 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). 9 15 U.S.C. 78f(4). 10 15 U.S.C. 78f(8). E:\FR\FM\18OCN1.SGM 18OCN1 63114 Federal Register / Vol. 87, No. 200 / Tuesday, October 18, 2022 / Notices khammond on DSKJM1Z7X2PROD with NOTICES necessary or appropriate in furtherance of the purposes of the Exchange Act. Nasdaq believes that research surrounding the value of diversity on a company’s board and investor interest in more diverse boards 11 supports the fact that the proposal to offer access to a board recruiting solution promotes just and equitable principles of trade and protects investors and the public interest. Nasdaq believes that by making this service available for a longer duration, more companies will seek to enhance the diversity of their boards to achieve these benefits. However, no company is required to use this service. Nasdaq believes it is reasonable, and not unfairly discriminatory, to offer the board recruiting solution only to Eligible Companies because these companies have the greatest need to identify diverse board candidates. They will need to identify diverse board candidates if they wish to satisfy that requirement instead of explaining why they do not satisfy it. Further, Nasdaq believes that companies that already have two Diverse directors will already be familiar with the benefits of board diversity and have demonstrated that they do not need Nasdaq’s assistance in identifying diverse candidates. Under Nasdaq Rule 5605(f), companies will have until August 6, 2023 to have, or explain why they do not have, at least one Diverse director and until August 6, 2025 to have, or explain why they do not have, at least two Diverse directors. Some Eligible Companies have already requested the service, other Eligible Companies may first use an alternate approach to identify a Diverse director. Therefore, to provide Eligible Companies with adequate time to determine whether to utilize the complimentary service before they first need to comply with Nasdaq Rule 5605(f), Nasdaq believes it is reasonable to extend the expiration date until December 1, 2023 to begin using the service. Nasdaq faces competition in the market for listing services,12 and competes, in part, by offering valuable services to companies. Nasdaq believes that it is reasonable to continue to offer this complimentary service as a tool to attract and retain listings as part of this competition. In particular, Nasdaq 11 Securities Exchange Act Release No. 92590 (August 6, 2021), 86 FR 44424 (August 12, 2021) (SR–NASDAQ–2020–082). 12 The Justice Department has noted the intense competitive environment for exchange listings. See ‘‘NASDAQ OMX Group Inc. and Intercontinental Exchange Inc. Abandon Their Proposed Acquisition Of NYSE Euronext After Justice Department Threatens Lawsuit’’ (May 16, 2011), available at https://www.justice.gov/atr/public/press_releases/ 2011/271214.htm. VerDate Sep<11>2014 19:52 Oct 17, 2022 Jkt 259001 believes some companies will view the proposed board recruiting solution as a valuable tool to help achieve diversity, to the potential benefit of the company and its investors. Nasdaq also believes that offering this complimentary service will help it compete to attract and retain listings in light of the additional requirements contained in Rule 5065(f). For these reasons, Nasdaq believes it is not an inequitable allocation of fees, unfairly discriminatory, nor an unnecessary or inappropriate burden on competition to continue to extend the offer of board recruiting solution only to Eligible Companies until December 1, 2023. Nasdaq represents that individual listed companies are not given specially negotiated packages of products or services to list, or remain listed, which the Commission has previously stated would raise unfair discrimination issues under the Exchange Act.13 In addition, the proposal to reflect the approval of SR–Nasdaq–2020–081, and to directly reference the now-approved Nasdaq Rule 5605(f), is non-substantive, and simply clarifies the rules. The Exchange believes that this is consistent with Section 6(b) of the Act,14 in general, and furthers the objectives of Section 6(b)(5) of the Act.15 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. As noted above, Nasdaq faces competition in the market for listing services, and competes, in part, by offering valuable services to companies. The proposed rule change reflects competition, but does not impose any burden on the competition with other exchanges. Rather, Nasdaq believes that some companies will find the proposed board recruiting solution an attractive offering and therefore make listing or remaining listed on Nasdaq more attractive, which will enhance competition for listings. Other exchanges can also offer similar services to companies, thereby increasing competition to the benefit of those companies and their shareholders. Accordingly, Nasdaq does not believe the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. 13 See Exchange Act Release No. 79366, 81 FR 85663 at 85665 (citing Securities Exchange Act Release No. 65127 (August 12, 2011), 76 FR 51449, 51452 (August 18, 2011) (approving NYSE–2011– 20)). 14 Ibid 9. 15 Ibid 10. PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 In addition, the proposal to reflect the approval of Nasdaq Rule 5605(f), is nonsubstantive, and simply aligns the rules in a clear and consistent manner. Nasdaq does not believe this change will impose any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act 16 and subparagraph (f)(6) of Rule 19b–4 thereunder.17 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 shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NASDAQ–2022–055 on the subject line. 16 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 17 17 E:\FR\FM\18OCN1.SGM 18OCN1 Federal Register / Vol. 87, No. 200 / Tuesday, October 18, 2022 / Notices 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–NASDAQ–2022–055. 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 website (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 website 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NASDAQ–2022–055 and should be submitted on or before November 8, 2022. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–22555 Filed 10–17–22; 8:45 am] khammond on DSKJM1Z7X2PROD with NOTICES BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96038; File No. SR– CboeBZX–2022–045] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change To Amend the Opening Auction Process Provided Under Rule 11.23(b)(2)(B) October 12, 2022. On August 15, 2022, Cboe BZX Exchange, Inc. (‘‘BZX’’) 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 the Opening Auction process provided under Rule 11.23(b)(2)(B). The proposed rule change was published for comment in the Federal Register on August 31, 2022.3 The Commission has received no comments on the proposed rule change. Section 19(b)(2) of the Act 4 provides that within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. The 45th day after publication of the notice for this proposed rule change is October 15, 2022. The Commission is extending this 45-day time period. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein. Accordingly, pursuant to Section 19(b)(2) of the Act,5 the Commission designates November 29, 2022, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 95601 (Aug. 25, 2022), 87 FR 53514. 4 15 U.S.C. 78s(b)(2). 5 Id. 2 17 18 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 19:52 Oct 17, 2022 Jkt 259001 PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 63115 proposed rule change (File No. SR– CboeBZX–2022–045). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–22554 Filed 10–17–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96044; File No. SR– PEARL–2022–42] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change by MIAX PEARL, LLC To Amend the MIAX Pearl Options Fee Schedule October 12, 2022. 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 September 29, 2022, MIAX PEARL, LLC (‘‘MIAX Pearl’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing a proposal to amend the MIAX Pearl Options Fee Schedule (the ‘‘Fee Schedule’’). The text of the proposed rule change is available on the Exchange’s website at https://www.miaxoptions.com/rulefilings/pearl at MIAX Pearl’s principal office, 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 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 6 17 CFR 200.30–3(a)(31). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\18OCN1.SGM 18OCN1

Agencies

[Federal Register Volume 87, Number 200 (Tuesday, October 18, 2022)]
[Notices]
[Pages 63113-63115]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-22555]



[[Page 63113]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96042; File No. SR-NASDAQ-2022-055]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Extend Nasdaq's Program Providing Eligible Companies With Complimentary 
Board Recruiting Services

October 12, 2022.
    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 October 4, 2022, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II, and III, below, which Items have been prepared by the 
Exchange. The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend Nasdaq's program providing Eligible 
Companies with complimentary board recruiting services.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, 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 and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Nasdaq is proposing to extend its program, described in IM-5900-9, 
providing Eligible Companies \3\ with complimentary board recruiting 
services. The rule currently requires Eligible Companies to request 
services by December 1, 2022; as revised that deadline would be 
extended to December 1, 2023. Nasdaq also proposes to make clarifying 
changes to reflect the approval of Rule 5605(f).
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    \3\ Under Nasdaq Rule IM-5900-9, an Eligible Company is:
    (a) any listed Company, except as described below, that 
represents to Nasdaq that it does not have (i) at least one director 
who self-identifies as female; and (ii) at least one director who 
self-identifies as one or more of the following: Black or African 
American, Hispanic or Latinx, Asian, Native American or Alaska 
Native, Native Hawaiian or Pacific Islander, or Two or More Races or 
Ethnicities, or who self-identifies as lesbian, gay, bisexual, 
transgender or as a member of the queer community;
    (b) a listed Company that (i) is a Foreign Private Issuer (as 
defined in Rule 5005(a)(19), or (ii) is considered a foreign issuer 
under Rule 3b-4(b) under the Act and has its principal executive 
offices located outside of the United States, if it represents to 
Nasdaq that it does not have (i) at least one director who self-
identifies as female; and (ii) at least one director who self-
identifies as one or more of the following: female, an 
underrepresented individual based on national, racial, ethnic, 
indigenous, cultural, religious or linguistic identity in the 
country of the company's principal executive offices, or lesbian, 
gay, bisexual, transgender or as a member of the queer community; or
    (c) a listed Company that is a Smaller Reporting Company (as 
defined in Rule 12b-2 under the Act), if it represents to Nasdaq 
that it does not have (i) at least one director who self-identifies 
as female, and (ii) at least one director who self-identifies as one 
or more of the following: female, Black or African American, 
Hispanic or Latinx, Asian, Native American or Alaska Native, Native 
Hawaiian or Pacific Islander, or Two or More Races or Ethnicities, 
or who self-identifies as lesbian, gay, bisexual, transgender or as 
a member of the queer community.
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    Under IM-5900-9,\4\ Nasdaq provides Eligible Companies with one 
year of complimentary access for two users to a board recruiting 
service, which provides access to a network of board-ready diverse 
candidates for companies to identify and evaluate. Nasdaq believes that 
offering this board recruiting solution assists and encourages listed 
companies to increase diverse representation on their boards, which can 
result in improved corporate governance, thus strengthening the 
integrity of the market and building investor confidence.
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    \4\ Securities Exchange Act Release No. 92590 (August 6, 2021), 
86 FR 44424 (August 12, 2021) (SR-NASDAQ-2020-082).
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    Currently, Eligible Companies may request the board recruiting 
complimentary service on or before December 1, 2022. After evaluating 
the service and progress made in enhancing diversity, Nasdaq proposes 
to extend the program until December 1, 2023. Under Nasdaq Rule 
5605(f)(7), the earliest that a Nasdaq listed company will need to 
explain why it does not have at least one Diverse \5\ director, is 
August 6, 2023; and the earliest it will have to explain why it does 
not have at least two Diverse directors is August 6, 2025.\6\ As such, 
Nasdaq believes it continues to be appropriate to offer the 
complimentary board recruiting service to Eligible Companies.
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    \5\ Nasdaq Rule 5605(f)(1) provides the definition of 
``Diverse''. ``Diverse'' means an individual who self-identifies in 
one or more of the following categories: Female, Underrepresented 
Minority, or LGBTQ+. ``Female'' means an individual who self-
identifies her gender as a woman, without regard to the individual's 
designated sex at birth.
    \6\ Nasdaq Rule 5065(f)(7)(A).
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    In addition, Nasdaq proposes to update the reference in Nasdaq Rule 
IM-5900-9 to Nasdaq's proposed rule contained in SR-Nasdaq-2020-081, as 
it pertains to the Diverse Board Representation, to instead reference 
the approved Nasdaq Rule 5605(f). This change is non-substantive, and 
clarifies the rules.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\7\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\8\ in particular, in that it is designed to promote 
just and equitable principles of trade, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general to protect investors and the public interest. 
It is also consistent with this provision because it is not designed to 
permit unfair discrimination between issuers. Nasdaq also believes that 
the proposed rule change is consistent with the provisions of Sections 
6(b)(4) \9\ and 6(b)(8),\10\ in that the proposal is designed, among 
other things, to provide for the equitable allocation of reasonable 
dues, fees, and other charges among Exchange members and issuers and 
other persons using its facilities and that the rules of the Exchange 
do not impose any burden on competition not

[[Page 63114]]

necessary or appropriate in furtherance of the purposes of the Exchange 
Act.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ 15 U.S.C. 78f(4).
    \10\ 15 U.S.C. 78f(8).
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    Nasdaq believes that research surrounding the value of diversity on 
a company's board and investor interest in more diverse boards \11\ 
supports the fact that the proposal to offer access to a board 
recruiting solution promotes just and equitable principles of trade and 
protects investors and the public interest. Nasdaq believes that by 
making this service available for a longer duration, more companies 
will seek to enhance the diversity of their boards to achieve these 
benefits. However, no company is required to use this service. Nasdaq 
believes it is reasonable, and not unfairly discriminatory, to offer 
the board recruiting solution only to Eligible Companies because these 
companies have the greatest need to identify diverse board candidates. 
They will need to identify diverse board candidates if they wish to 
satisfy that requirement instead of explaining why they do not satisfy 
it. Further, Nasdaq believes that companies that already have two 
Diverse directors will already be familiar with the benefits of board 
diversity and have demonstrated that they do not need Nasdaq's 
assistance in identifying diverse candidates.
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    \11\ Securities Exchange Act Release No. 92590 (August 6, 2021), 
86 FR 44424 (August 12, 2021) (SR-NASDAQ-2020-082).
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    Under Nasdaq Rule 5605(f), companies will have until August 6, 2023 
to have, or explain why they do not have, at least one Diverse director 
and until August 6, 2025 to have, or explain why they do not have, at 
least two Diverse directors. Some Eligible Companies have already 
requested the service, other Eligible Companies may first use an 
alternate approach to identify a Diverse director. Therefore, to 
provide Eligible Companies with adequate time to determine whether to 
utilize the complimentary service before they first need to comply with 
Nasdaq Rule 5605(f), Nasdaq believes it is reasonable to extend the 
expiration date until December 1, 2023 to begin using the service.
    Nasdaq faces competition in the market for listing services,\12\ 
and competes, in part, by offering valuable services to companies. 
Nasdaq believes that it is reasonable to continue to offer this 
complimentary service as a tool to attract and retain listings as part 
of this competition. In particular, Nasdaq believes some companies will 
view the proposed board recruiting solution as a valuable tool to help 
achieve diversity, to the potential benefit of the company and its 
investors. Nasdaq also believes that offering this complimentary 
service will help it compete to attract and retain listings in light of 
the additional requirements contained in Rule 5065(f).
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    \12\ The Justice Department has noted the intense competitive 
environment for exchange listings. See ``NASDAQ OMX Group Inc. and 
Intercontinental Exchange Inc. Abandon Their Proposed Acquisition Of 
NYSE Euronext After Justice Department Threatens Lawsuit'' (May 16, 
2011), available at https://www.justice.gov/atr/public/press_releases/2011/271214.htm.
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    For these reasons, Nasdaq believes it is not an inequitable 
allocation of fees, unfairly discriminatory, nor an unnecessary or 
inappropriate burden on competition to continue to extend the offer of 
board recruiting solution only to Eligible Companies until December 1, 
2023. Nasdaq represents that individual listed companies are not given 
specially negotiated packages of products or services to list, or 
remain listed, which the Commission has previously stated would raise 
unfair discrimination issues under the Exchange Act.\13\
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    \13\ See Exchange Act Release No. 79366, 81 FR 85663 at 85665 
(citing Securities Exchange Act Release No. 65127 (August 12, 2011), 
76 FR 51449, 51452 (August 18, 2011) (approving NYSE-2011-20)).
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    In addition, the proposal to reflect the approval of SR-Nasdaq-
2020-081, and to directly reference the now-approved Nasdaq Rule 
5605(f), is non-substantive, and simply clarifies the rules. The 
Exchange believes that this is consistent with Section 6(b) of the 
Act,\14\ in general, and furthers the objectives of Section 6(b)(5) of 
the Act.\15\
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    \14\ Ibid 9.
    \15\ Ibid 10.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. As noted above, Nasdaq faces 
competition in the market for listing services, and competes, in part, 
by offering valuable services to companies. The proposed rule change 
reflects competition, but does not impose any burden on the competition 
with other exchanges. Rather, Nasdaq believes that some companies will 
find the proposed board recruiting solution an attractive offering and 
therefore make listing or remaining listed on Nasdaq more attractive, 
which will enhance competition for listings.
    Other exchanges can also offer similar services to companies, 
thereby increasing competition to the benefit of those companies and 
their shareholders. Accordingly, Nasdaq does not believe the proposed 
rule change will impose any burden on competition that is not necessary 
or appropriate in furtherance of the purposes of the Exchange Act.
    In addition, the proposal to reflect the approval of Nasdaq Rule 
5605(f), is non-substantive, and simply aligns the rules in a clear and 
consistent manner. Nasdaq does not believe this change will impose any 
burden on competition.

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

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \16\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\17\
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    \16\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \17\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is 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 [email protected]. Please include 
File Number SR-NASDAQ-2022-055 on the subject line.

[[Page 63115]]

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-NASDAQ-2022-055. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NASDAQ-2022-055 and should be submitted 
on or before November 8, 2022.

    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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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-22555 Filed 10-17-22; 8:45 am]
BILLING CODE 8011-01-P
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