Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Order Granting Approval of a Proposed Rule Change To Modify the Package of Complimentary Services Provided to Certain Eligible Switches September 12, 2023 and Make Other Changes to IM-5900-7 and IM-5900-7A, 64016-64019 [2023-20087]
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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 that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange expects other options
exchanges will adopt substantively
similar proposals, such that there would
be no burden on intermarket
competition from the Exchange’s
proposal. Accordingly, the proposed
change is not meant to affect
competition among the options
exchanges. For these reasons, the
Exchange believes that the proposed
rule change reflects this competitive
environment and does not impose any
undue burden on intermarket
competition.
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
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) of the Act 22 and Rule 19b–
4(f)(6) 23 thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 24 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),25 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposed
rule change may become operative upon
filing. The Exchange requested the
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22 15
U.S.C. 78s(b)(3)(A).
23 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, along with a brief
description and text of 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.
24 17 CFR 240.19b–4(f)(6).
25 17 CFR 240.19b–4(f)(6)(iii).
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waiver, stating its desire to harmonize
its rules to those of NYSE American to
ensure fair competition among the
options exchanges. Further, the
proposed change would allow options
on IPO’d securities to come to market
sooner (i.e., at least two business days
post-IPO not inclusive of the day of the
IPO) without sacrificing investor
protection. For these reasons, and
because the proposed rule change does
not raise any novel legal or regulatory
issues, the Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest.
Therefore, the Commission hereby
waives the 30-day operative delay and
designates the proposal operative upon
filing.26
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
change should be approved or
disapproved.
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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–CboeBZX–2023–064 and should be
submitted on or before October 10,
2023.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
Sherry R. Haywood,
Assistant Secretary.
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–
CboeBZX–2023–064 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–CboeBZX–2023–064. 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
26 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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[FR Doc. 2023–20080 Filed 9–15–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98367; File No. SR–
NASDAQ–2023–017]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Order
Granting Approval of a Proposed Rule
Change To Modify the Package of
Complimentary Services Provided to
Certain Eligible Switches September
12, 2023 and Make Other Changes to
IM–5900–7 and IM–5900–7A
September 12, 2023.
I. Introduction
On June 21, 2023, The Nasdaq Stock
Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
27 17
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CFR 200.30–3(a)(12).
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(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to modify the
package of complimentary services
provided to eligible companies and
make other changes to Nasdaq Rules
IM–5900–7 and IM–5900–7A. The
proposed rule change was published for
comment in the Federal Register on July
10, 2023.3 On August 21, 2023, the
Commission extended the time period
within which to approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to approve or
disapprove the proposed rule change to
October 8, 2023.4 The Commission did
not receive any comments. As discussed
further below, the Commission is
approving the proposed rule change.
II. Description of the Proposal
The Exchange proposes to modify the
package of complimentary services
provided to certain Eligible Switches,5
to update the values of complimentary
services provided under Nasdaq Rules
IM–5900–7 and IM–5900–7A, and to
remove obsolete provisions from Nasdaq
Rule IM–5900–7A.
Currently, Nasdaq offers
complimentary services under Nasdaq
Rule IM–5900–7 to Eligible New
Listings 6 and Eligible Switches 7 newly
listing on Nasdaq’s Global or Global
Select Market (collectively, ‘‘Eligible
Companies’’).8 The services offered
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 97833
(July 3, 2023), 88 FR 43637 (‘‘Notice’’).
4 See Securities Exchange Act Release No. 98172
(August 25, 2023), 88 FR 58341.
5 IM–5900–7 defines an Eligible Switch as ‘‘a
Company: (i) (other than a Company listed under
IM–5101–2) switching its listing from the New York
Stock Exchange to the Global or Global Select
Markets, or (ii) that has switched its listing from the
New York Stock Exchange and listed on Nasdaq
under IM–5101–2 after the Company publicly
announced that it entered into a binding agreement
for a business combination and that subsequently
satisfies the conditions in IM–5101–2(b) and lists
on the Global or Global Select Market in
conjunction with that business combination.’’
6 IM–5900–7 defines an Eligible New Listing as ‘‘a
Company listing on the Global or Global Select
Market in connection with: (i) an initial public
offering in the United States, including American
Depository Receipts (other than a Company listed
under IM–5101–2), (ii) upon emerging from
bankruptcy, (iii) in connection with a spin-off or
carve-out from another Company, (iv) in connection
with a Direct Listing as defined in IM–5315–1
(including the listing of American Depository
Receipts), or (v) in conjunction with a business
combination that satisfies the conditions in IM–
5101–2(b).’’
7 See supra note 5.
8 See IM–5900–7A (describing the Service
Package available to companies that listed before
March 12, 2021, the effective date of SR–NASDAQ–
2021–002). See also Securities Exchange Act
Release No. 91318 (March 12, 2021), 86 FR 14774
(March 18, 2021) (SR–NASDAQ–2021–002)
(modifying the package of complimentary services
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include a whistleblower hotline,
investor relations website, disclosure
services for earnings or other press
releases, webcasting, market analytic
tools, environmental, social and
governance (‘‘ESG’’) services, and may
include market advisory tools such as
stock surveillance (collectively the
‘‘Service Package’’).9 For Eligible New
Listings, Nasdaq offers different tiers of
complimentary services packages based
upon whether the company has a
market capitalization of (1) less than
$750 million or (2) $750 million or
more.10 For Eligible Switches, Nasdaq
offers different tiers of complimentary
services packages based upon whether
the company has a market capitalization
of (i) less than $750 million; (ii) $750
million or more but less than $5 billion;
or (iii) $5 billion or more.11 Nasdaq
states that it believes that the
complimentary service program offers
valuable services to newly listing
companies, is designed to help ease the
transition of becoming a public
company or switching markets, and
makes listing on Nasdaq more attractive
to these companies.12 According to
Nasdaq, it faces competition in the
market for listing services and believes
that it is reasonable to offer
complimentary services to attract and
retain listings as part of this
competition.13
Nasdaq proposes to modify the ESG
services available to Eligible Switches
with a market capitalization of $5
billion or more that list on or after the
date of the Commission’s approval of
the proposed rule change.14 Nasdaq
states that, based on Nasdaq’s
experience since first including the ESG
services in the Service Package for all
Eligible Companies in 2021,15 Nasdaq
has become aware that as companies
mature and become larger, they no
longer rely on services like the Core ESG
software solution, but instead need
more sophisticated programs with
additional metrics.16 Nasdaq states that
the Core ESG software solution is not
valuable to these larger seasoned
companies and Nasdaq proposes to
instead offer Eligible Switches with a
market capitalization of $5 billion or
more an advanced software solution,
which will enable the company to select
additional metrics to use in the solution
(‘‘Advanced ESG Software Solution’’).17
Nasdaq states that the Advanced ESG
Software Solution will allow the
company to track approximately ten
times as many standard performance
indicators and also allows the company
to select and track additional custom
performance indicators.18 Further,
Nasdaq states that it will offer these
companies $60,000 worth of ESG
consulting services per year (‘‘ESG
Advisory Services’’) (collectively with
Advanced ESG Software Solution,
‘‘Advanced ESG Services’’).19 According
to Nasdaq, it believes that offering
different ESG services based on a
company’s market capitalization is not
unfairly discriminatory because larger
companies generally will need more and
different ESG services, and that those
issuers will likely bring greater future
provided to eligible companies and setting forth in
IM–5900–7A the services offered to eligible
companies that listed before the effective date of the
change).
9 According to Nasdaq, in addition, all companies
listed on Nasdaq receive other standard services
from Nasdaq, including Nasdaq Online and the
Market Intelligence Desk. See Notice, supra note 3,
at 43637, n.6.
10 See IM–5900–7(c) for additional detail about
the types of complimentary services and length of
the complimentary services period offered to each
tier of Eligible New Listings.
11 See IM–5900–7(d) for additional detail about
the types of complimentary services and length of
the complimentary services period offered to each
tier of Eligible Switches.
12 See Notice, supra note 3 at 43637.
13 See id. at 43638. Nasdaq further states that all
similarly situated companies are eligible for the
same package of services. Id. at 43638.
14 See proposed IM–5900–7(d)(3)(A). Nasdaq also
proposes to add a new paragraph to IM–5900–
7(d)(3)(B) that sets forth the ESG services provided
to an Eligible Switch with a market capitalization
of $5 billion or more that listed before the effective
date of the proposal. Specifically, proposed IM–
5900–7(d)(3)(B) states: ‘‘an Eligible Switch that
listed before [the effective date of SR–NASDAQ–
2023–017] and had a market capitalization of $5
billion or more is not eligible to receive the
Advanced ESG Service or ESG Advisory Services,
but instead receives the Core ESG Software Solution
for four years. The total retail value of these services
is up to approximately $281,200 per year. The
Company will also receive one Virtual Event during
the four-year period, which has a retail value of
approximately $11,700.’’
15 See supra note 8. All Eligible Companies
receive access to a Core ESG software solution. This
service is currently called ‘‘ESG Core’’ in IM–5900–
7. Nasdaq proposes to make a technical change to
rename the service to ‘‘Core ESG Software
Solution.’’ No other changes are proposed to the
service.
16 See Notice, supra note 3 at 43637.
17 See id. Nasdaq states this service has a retail
value of approximately $52,500 per year. See id. at
n. 10. In addition, one-time development fees of up
to $21,500 to establish the services in the first year
will be waived. See id. at n. 10. According to
Nasdaq, the total one-time development fees that
are waived for Eligible Companies that receive this
service, as reflected in proposed IM–5900–
7(d)(3)(A) is approximately $26,500, which also
includes approximately $5,000 to establish the
investor relations website. See id. at n. 10.
18 See id. at 43637.
19 See id. Nasdaq states that these services are
designed to aid the company in identifying and
incorporating ESG metrics into communications,
with customized analysis and recommendations.
See id.
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value to Nasdaq than will other issuers
by switching to its market.20
Further, each of these services will be
available to Eligible Switches with a
market capitalization of $5 billion or
more for the same four-year term
provided for other services to such
category of Eligible Switches under
Nasdaq Rule IM–5900–7.21 Nasdaq
states that no company is required to
use these services as a condition of
listing and, as is the case with other
complimentary services, at the end of
the package term, companies may
choose to renew these services or
discontinue them.22
Nasdaq also proposes to update the
values of the services contained in
Nasdaq Rules IM–5900–7 and IM–5900–
7A to their current values.23 According
to Nasdaq, depending on a company’s
market capitalization and whether it is
an Eligible New Listing or an Eligible
Switch, the total revised value of the
services provided to Eligible Companies
(including the waiver of one-time fees)
ranges from $364,800 to $1,533,000.24
Finally, Nasdaq proposes to simplify
Nasdaq Rule IM–5900–7A by crossreferencing the description of services
and their values that also appears in
Nasdaq Rule IM–5900–7 and by deleting
the descriptions of offerings that are no
longer available to any companies.25
20 See id. at 43639. Nasdaq also states that such
companies would more likely forego ESG services
offered by their current exchange when switching
their listing to Nasdaq, which smaller companies
would not. See id. See also Securities Exchange Act
Release No. 94222 (February 10, 2022), 87 FR 8886
(February 16, 2022) (SR–NYSE–2021–68)
(approving changes to NYSE Listed Company
Manual Section 907.00, including the offer of ESG
tools to currently listed companies with 270 million
or more total shares of common stock outstanding,
but not to companies with fewer shares
outstanding).
21 See Notice, supra note 3 at 43637–38.
22 See id. at 43637.
23 Nasdaq states that these services are offered
through Nasdaq Corporate Solutions, LLC, an
affiliate of Nasdaq, or a third-party provider
selected by Nasdaq. See id. at 43638.
24 See id. The exact values are set forth in
proposed IM–5900–7 and IM–5900–7A. Nasdaq
states that, in describing the total value of the
services for companies that can select more than
one market advisory tool, Nasdaq presumes that a
company would use stock surveillance, which has
an approximate retail value of $56,500, and global
targeting, which has an approximate retail value of
$48,000. See id. Nasdaq states that companies could
select different combinations of the three services
offered with lower total approximate retail values.
See id.
25 As to the description of offerings being deleted
from IM–5900–7A, Nasdaq states that the services
described in IM–5900–7A(c) and (d)(1) were
provided for a term of two years to companies that
listed before March 12, 2021. See id. at n. 13.
Additionally, Nasdaq states that no company still
receives the services described in IM–5900–7A(g),
which applies only to companies that listed before
April 23, 2018. See id. Nasdaq also proposes to
revise the title of IM–5900–7 to specify that the rule
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Nasdaq represents that no other
company will be required to pay higher
fees as a result of the proposed
amendments and that providing this
service will have no impact on the
resources available for its regulatory
programs.26
III. Discussion and Commission’s
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent Section 6 of the Act.27
Specifically, the Commission finds that
the proposed rule change is consistent
with Sections 6(b)(4) and (5) of the
Act,28 in particular, in that it is designed
to provide for the equitable allocation of
reasonable dues, fees, and other charges
among Exchange members, issuers, and
other persons using the Exchange’s
facilities, and, in general to protect
investors and the public interest and is
not designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers. Moreover,
the Commission believes that the
proposed rule change is consistent with
Section 6(b)(8) of the Act,29 in that it
does not impose any burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Act.
The Commission believes that Nasdaq
is responding to competitive pressures
in the market for listings in making this
proposal. Nasdaq states in its proposal
that it faces competition in the market
for listing services and that it competes,
in part, by offering complimentary
services to companies.30 Specifically,
Nasdaq is increasing the types of
complimentary ESG services offered for
certain Eligible Switches that list on or
after the effective date of the proposed
rule change. Nasdaq states that the
Advanced ESG Services will help
eligible companies communicate with
their shareholders and other
stakeholders by helping collect, store
and disclose ESG data chosen by the
company and guiding messaging and
reporting of that information.31 Nasdaq
also states that the services will help
specifies the services offered to certain newly
listing companies listed on or after March 12, 2021.
See also supra note 14 and accompanying text.
26 See id. at 43638. Nasdaq also represents that
the proposed rule change will help ensure that
individual listed companies are not given specially
negotiated packages of products or services to list,
or remain listed. See id.
27 15 U.S.C. 78f(b). 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).
28 15 U.S.C. 78f(b)(4) and (5).
29 15 U.S.C. 78f(b)(8).
30 See Notice, supra note 3, at 43638.
31 See id.
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assess the company’s current ESG
program, identify ESG risk and
opportunities, and establish strategies
for risk management and opportunity
capture.32 In addition, Nasdaq states
that no company is required to use these
complimentary services.33 Further,
Nasdaq states that offering different ESG
services based on a company’s market
capitalization is not unfairly
discriminatory because larger
companies generally will need more and
different ESG services and that those
issuers will likely bring greater future
value to Nasdaq than other issuers by
switching to its market.34
As stated in the Commission’s
previous order approving Nasdaq Rule
IM–5900–7, Section 6(b)(5) of the Act
does not require that all issuers be
treated the same; rather, the Act requires
that the rules of an exchange not
unfairly discriminate between issuers.35
As the Commission has previously
found, it is reasonable for Nasdaq to
provide different services to tiers based
on market capitalization since larger
capitalized companies generally will
need and use more services.36 The
Commission believes that it is
reasonable and consistent with Section
6(b)(5) of the Act for the Exchange to
offer the new Advanced ESG Services to
Eligible Switches with a market
32 See
id.
id. at 43637.
34 See id. at 43639. The Exchange also states that
companies would more likely forego ESG services
offered by their current exchange given that NYSE
offers ESG tools to currently listed companies with
270 million or more total shares of common stock
outstanding, but not to companies with fewer
shares outstanding. See id. at 43638. See also NYSE
Listed Company Manual Section 907.00.
35 15 U.S.C. 78f(b)(5); see also Securities
Exchange Act Release No. 65963 (December 15,
2011), 76 FR 79262, 79266 (December 21, 2011)
(approving SR–NASDAQ–2011–122) (‘‘2011
Approval Order’’) (‘‘The Commission believes that
Nasdaq has provided a sufficient basis for its
different treatment of Eligible Switches and that
this portion of Nasdaq’s proposal meets the
requirements of the Act in that it reflects
competition between exchanges, with Nasdaq
offering discounts for transfers of listings from a
competing exchange.’’). See also Exchange Act
Release No. 79366 (November 21, 2016), 81 FR
85663, 85665 (November 28, 2016) (approving SR–
NASDAQ–2016–106) (‘‘2016 Approval Order’’)
(citing Securities Exchange Act Release No. 65127
(August 12, 2011), 76 FR 51449, 51452 (August 18,
2011) (approving SR–NYSE–2011–20) (‘‘NYSE
Approval Order’’)).
36 See 2011 Approval Order, supra note 35, at
79266. As the Commission previously stated,
Nasdaq’s rationale for treating NYSE transfers
differently from other types of transfers, including
that those issuers provided greater future value to
Nasdaq through their listing than do other issuers
and that the issuers must forego similar services
provided by NYSE, among other factors, justified
such differential treatment. See id. As stated above
Nasdaq, provided similar rationale for only
providing the Advanced ESG Services to Eligible
Switches with a market capitalization of $5 billion
or more.
33 See
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capitalization of $5 billion or more that
list on or after the date of approval of
the proposed rule change. For the
reasons stated above, the Commission
also believes that the proposal does not
unfairly discriminate among issuers and
is therefore consistent with Section
6(b)(5) of the Act. In addition, the
Commission believes that the proposed
rule reflects the current competitive
environment for exchange listings
among national securities exchanges,
and is appropriate and consistent with
Section 6(b)(8) of the Act.37
Further, the Commission believes that
describing in the Exchange’s rules the
products and services available to
Eligible Companies and their associated
values, as well as the length of time
companies are entitled to receive such
services, will ensure that individual
listed companies are not given specially
negotiated packages of products or
services to list, or remain listed, that
would raise unfair discrimination issues
under the Act.38 The Commission has
previously found that the package of
complimentary services offered to
Eligible Companies is equitably
allocated among issuers consistent with
Section 6(b)(4) of the Act and that
describing the values of the services
adds greater transparency to the
Exchange’s rules and to the fees
applicable to such companies.39 As
discussed above, the Commission
believes that adding the Advanced ESG
Services to the complimentary services
package offered to Eligible Switches
with a market capitalization of $5
billion or more for Eligible Switches
that list on or after the effective date of
the proposed rule change is consistent
with Section 6(b)(5) of the Act. As stated
above, the Commission also believes
that the proposal does not unfairly
discriminate among issuers and is
therefore consistent with Section 6(b)(5)
of the Act. For similar reasons, the
Commission believes that the packages
of complimentary services to be offered
pursuant to Nasdaq’s proposal are
equitably allocated among issuers
37 15
U.S.C. 78f(b)(8).
2016 Approval Order, supra note 35, at
85665 (citing NYSE Approval Order, supra note 35,
at 51452). The Commission notes that Nasdaq
represents that no other company will be required
to pay higher fees as a result of the proposal, that
the proposal will have no impact on the resources
available for its regulatory programs, and that the
proposal will help to ensure that individual listed
companies are not given specially negotiated
packages of products or services to list, or remain
listed. See supra note 26 and accompanying text.
39 See 2016 Approval Order, supra note 35, at
85665; 2011 Approval Order, supra note 35, at
79266.
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consistent with Section 6(b)(4) of the
Act.
The Commission also believes that it
is reasonable, and required by Section
19(b) of the Act,40 that Nasdaq amend
its rules to update the products and
services it offers to Eligible Companies
contained in Nasdaq Rules IM–5900–7
and IM–5900–7A, including the time
periods for which such products and
services are offered and the commercial
value of such products and services.
This provides greater transparency to
the Exchange’s rules and the fees, and
the value of complementary products
and services, applicable to Eligible
Companies.
Finally, the Commission finds that it
is consistent with Section 6(b)(5) of the
Act 41 for Nasdaq to make various
technical and conforming revisions, as
described above,42 to facilitate clarity of
its rules.
Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,43 that the
proposed rule change (SR–NASDAQ–
2023–017) be, and it hereby is,
approved.
DATES:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.44
Sherry R. Haywood,
Assistant Secretary.
Primary Counties (Physical Damage and
Economic Injury Loans): Cook,
Glynn, Lowndes.
Contiguous Counties (Economic Injury
Loans Only):
Georgia: Berrien, Brantley, Brooks,
Camden, Colquitt, Echols, Lanier,
McIntosh, Tift, Wayne.
Florida: Hamilton, Madison.
[FR Doc. 2023–20087 Filed 9–15–23; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #18143 and #18144;
Georgia Disaster Number GA–00158]
Presidential Declaration of a Major
Disaster for the State of Georgia
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
This is a Notice of the
Presidential declaration of a major
disaster for the State of Georgia (FEMA–
4738–DR), dated 09/07/2023.
Incident: Hurricane Idalia.
Incident Period: 08/30/2023.
SUMMARY:
40 See Exchange Act Release No. 72669 (July 24,
2014), 79 FR 44234, 44236, n.39 (July 30, 2014)
(SR–NASDAQ–2014–058) (‘‘We would expect
Nasdaq, consistent with Section 19(b) of the
Exchange Act, to periodically update the retail
values of services offered should they change. This
will help to provide transparency to listed
companies on the value of the free services they
receive and the actual costs associated with listing
on Nasdaq.’’).
41 15 U.S.C. 78f(b)(5).
42 See supra note 25 and accompanying text.
43 15 U.S.C. 78s(b)(2).
44 17 CFR 200.30–3(a)(12).
PO 00000
Frm 00091
Fmt 4703
Sfmt 4703
Issued on 09/07/2023.
Physical Loan Application Deadline
Date: 11/06/2023.
Economic Injury (EIDL) Loan
Application Deadline Date: 06/07/2024.
Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
ADDRESSES:
A.
Escobar, Office of Disaster Recovery &
Resilience, U.S. Small Business
Administration, 409 3rd Street SW,
Suite 6050, Washington, DC 20416,
(202) 205–6734.
FOR FURTHER INFORMATION CONTACT:
Notice is
hereby given that as a result of the
President’s major disaster declaration on
09/07/2023, applications for disaster
loans may be filed at the address listed
above or other locally announced
locations.
The following areas have been
determined to be adversely affected by
the disaster:
SUPPLEMENTARY INFORMATION:
The Interest Rates are:
Percent
For Physical Damage:
Homeowners with Credit Available Elsewhere ......................
Homeowners without Credit
Available Elsewhere ..............
Businesses with Credit Available Elsewhere ......................
Businesses without Credit
Available Elsewhere ..............
Non-Profit Organizations with
Credit Available Elsewhere ...
Non-Profit Organizations without Credit Available Elsewhere .....................................
For Economic Injury:
Businesses & Small Agricultural
Cooperatives without Credit
Available Elsewhere ..............
Non-Profit Organizations without Credit Available Elsewhere .....................................
5.000
2.500
8.000
4.000
2.375
2.375
4.000
2.375
The number assigned to this disaster
for physical damage is 18143 8 and for
economic injury is 18144 0.
E:\FR\FM\18SEN1.SGM
18SEN1
Agencies
[Federal Register Volume 88, Number 179 (Monday, September 18, 2023)]
[Notices]
[Pages 64016-64019]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20087]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98367; File No. SR-NASDAQ-2023-017]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Order
Granting Approval of a Proposed Rule Change To Modify the Package of
Complimentary Services Provided to Certain Eligible Switches September
12, 2023 and Make Other Changes to IM-5900-7 and IM-5900-7A
September 12, 2023.
I. Introduction
On June 21, 2023, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
[[Page 64017]]
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
modify the package of complimentary services provided to eligible
companies and make other changes to Nasdaq Rules IM-5900-7 and IM-5900-
7A. The proposed rule change was published for comment in the Federal
Register on July 10, 2023.\3\ On August 21, 2023, the Commission
extended the time period within which to approve the proposed rule
change, disapprove the proposed rule change, or institute proceedings
to determine whether to approve or disapprove the proposed rule change
to October 8, 2023.\4\ The Commission did not receive any comments. As
discussed further below, the Commission is approving 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. 97833 (July 3,
2023), 88 FR 43637 (``Notice'').
\4\ See Securities Exchange Act Release No. 98172 (August 25,
2023), 88 FR 58341.
---------------------------------------------------------------------------
II. Description of the Proposal
The Exchange proposes to modify the package of complimentary
services provided to certain Eligible Switches,\5\ to update the values
of complimentary services provided under Nasdaq Rules IM-5900-7 and IM-
5900-7A, and to remove obsolete provisions from Nasdaq Rule IM-5900-7A.
---------------------------------------------------------------------------
\5\ IM-5900-7 defines an Eligible Switch as ``a Company: (i)
(other than a Company listed under IM-5101-2) switching its listing
from the New York Stock Exchange to the Global or Global Select
Markets, or (ii) that has switched its listing from the New York
Stock Exchange and listed on Nasdaq under IM-5101-2 after the
Company publicly announced that it entered into a binding agreement
for a business combination and that subsequently satisfies the
conditions in IM-5101-2(b) and lists on the Global or Global Select
Market in conjunction with that business combination.''
---------------------------------------------------------------------------
Currently, Nasdaq offers complimentary services under Nasdaq Rule
IM-5900-7 to Eligible New Listings \6\ and Eligible Switches \7\ newly
listing on Nasdaq's Global or Global Select Market (collectively,
``Eligible Companies'').\8\ The services offered include a
whistleblower hotline, investor relations website, disclosure services
for earnings or other press releases, webcasting, market analytic
tools, environmental, social and governance (``ESG'') services, and may
include market advisory tools such as stock surveillance (collectively
the ``Service Package'').\9\ For Eligible New Listings, Nasdaq offers
different tiers of complimentary services packages based upon whether
the company has a market capitalization of (1) less than $750 million
or (2) $750 million or more.\10\ For Eligible Switches, Nasdaq offers
different tiers of complimentary services packages based upon whether
the company has a market capitalization of (i) less than $750 million;
(ii) $750 million or more but less than $5 billion; or (iii) $5 billion
or more.\11\ Nasdaq states that it believes that the complimentary
service program offers valuable services to newly listing companies, is
designed to help ease the transition of becoming a public company or
switching markets, and makes listing on Nasdaq more attractive to these
companies.\12\ According to Nasdaq, it faces competition in the market
for listing services and believes that it is reasonable to offer
complimentary services to attract and retain listings as part of this
competition.\13\
---------------------------------------------------------------------------
\6\ IM-5900-7 defines an Eligible New Listing as ``a Company
listing on the Global or Global Select Market in connection with:
(i) an initial public offering in the United States, including
American Depository Receipts (other than a Company listed under IM-
5101-2), (ii) upon emerging from bankruptcy, (iii) in connection
with a spin-off or carve-out from another Company, (iv) in
connection with a Direct Listing as defined in IM-5315-1 (including
the listing of American Depository Receipts), or (v) in conjunction
with a business combination that satisfies the conditions in IM-
5101-2(b).''
\7\ See supra note 5.
\8\ See IM-5900-7A (describing the Service Package available to
companies that listed before March 12, 2021, the effective date of
SR-NASDAQ-2021-002). See also Securities Exchange Act Release No.
91318 (March 12, 2021), 86 FR 14774 (March 18, 2021) (SR-NASDAQ-
2021-002) (modifying the package of complimentary services provided
to eligible companies and setting forth in IM-5900-7A the services
offered to eligible companies that listed before the effective date
of the change).
\9\ According to Nasdaq, in addition, all companies listed on
Nasdaq receive other standard services from Nasdaq, including Nasdaq
Online and the Market Intelligence Desk. See Notice, supra note 3,
at 43637, n.6.
\10\ See IM-5900-7(c) for additional detail about the types of
complimentary services and length of the complimentary services
period offered to each tier of Eligible New Listings.
\11\ See IM-5900-7(d) for additional detail about the types of
complimentary services and length of the complimentary services
period offered to each tier of Eligible Switches.
\12\ See Notice, supra note 3 at 43637.
\13\ See id. at 43638. Nasdaq further states that all similarly
situated companies are eligible for the same package of services.
Id. at 43638.
---------------------------------------------------------------------------
Nasdaq proposes to modify the ESG services available to Eligible
Switches with a market capitalization of $5 billion or more that list
on or after the date of the Commission's approval of the proposed rule
change.\14\ Nasdaq states that, based on Nasdaq's experience since
first including the ESG services in the Service Package for all
Eligible Companies in 2021,\15\ Nasdaq has become aware that as
companies mature and become larger, they no longer rely on services
like the Core ESG software solution, but instead need more
sophisticated programs with additional metrics.\16\ Nasdaq states that
the Core ESG software solution is not valuable to these larger seasoned
companies and Nasdaq proposes to instead offer Eligible Switches with a
market capitalization of $5 billion or more an advanced software
solution, which will enable the company to select additional metrics to
use in the solution (``Advanced ESG Software Solution'').\17\ Nasdaq
states that the Advanced ESG Software Solution will allow the company
to track approximately ten times as many standard performance
indicators and also allows the company to select and track additional
custom performance indicators.\18\ Further, Nasdaq states that it will
offer these companies $60,000 worth of ESG consulting services per year
(``ESG Advisory Services'') (collectively with Advanced ESG Software
Solution, ``Advanced ESG Services'').\19\ According to Nasdaq, it
believes that offering different ESG services based on a company's
market capitalization is not unfairly discriminatory because larger
companies generally will need more and different ESG services, and that
those issuers will likely bring greater future
[[Page 64018]]
value to Nasdaq than will other issuers by switching to its market.\20\
---------------------------------------------------------------------------
\14\ See proposed IM-5900-7(d)(3)(A). Nasdaq also proposes to
add a new paragraph to IM-5900-7(d)(3)(B) that sets forth the ESG
services provided to an Eligible Switch with a market capitalization
of $5 billion or more that listed before the effective date of the
proposal. Specifically, proposed IM-5900-7(d)(3)(B) states: ``an
Eligible Switch that listed before [the effective date of SR-NASDAQ-
2023-017] and had a market capitalization of $5 billion or more is
not eligible to receive the Advanced ESG Service or ESG Advisory
Services, but instead receives the Core ESG Software Solution for
four years. The total retail value of these services is up to
approximately $281,200 per year. The Company will also receive one
Virtual Event during the four-year period, which has a retail value
of approximately $11,700.''
\15\ See supra note 8. All Eligible Companies receive access to
a Core ESG software solution. This service is currently called ``ESG
Core'' in IM-5900-7. Nasdaq proposes to make a technical change to
rename the service to ``Core ESG Software Solution.'' No other
changes are proposed to the service.
\16\ See Notice, supra note 3 at 43637.
\17\ See id. Nasdaq states this service has a retail value of
approximately $52,500 per year. See id. at n. 10. In addition, one-
time development fees of up to $21,500 to establish the services in
the first year will be waived. See id. at n. 10. According to
Nasdaq, the total one-time development fees that are waived for
Eligible Companies that receive this service, as reflected in
proposed IM-5900-7(d)(3)(A) is approximately $26,500, which also
includes approximately $5,000 to establish the investor relations
website. See id. at n. 10.
\18\ See id. at 43637.
\19\ See id. Nasdaq states that these services are designed to
aid the company in identifying and incorporating ESG metrics into
communications, with customized analysis and recommendations. See
id.
\20\ See id. at 43639. Nasdaq also states that such companies
would more likely forego ESG services offered by their current
exchange when switching their listing to Nasdaq, which smaller
companies would not. See id. See also Securities Exchange Act
Release No. 94222 (February 10, 2022), 87 FR 8886 (February 16,
2022) (SR-NYSE-2021-68) (approving changes to NYSE Listed Company
Manual Section 907.00, including the offer of ESG tools to currently
listed companies with 270 million or more total shares of common
stock outstanding, but not to companies with fewer shares
outstanding).
---------------------------------------------------------------------------
Further, each of these services will be available to Eligible
Switches with a market capitalization of $5 billion or more for the
same four-year term provided for other services to such category of
Eligible Switches under Nasdaq Rule IM-5900-7.\21\ Nasdaq states that
no company is required to use these services as a condition of listing
and, as is the case with other complimentary services, at the end of
the package term, companies may choose to renew these services or
discontinue them.\22\
---------------------------------------------------------------------------
\21\ See Notice, supra note 3 at 43637-38.
\22\ See id. at 43637.
---------------------------------------------------------------------------
Nasdaq also proposes to update the values of the services contained
in Nasdaq Rules IM-5900-7 and IM-5900-7A to their current values.\23\
According to Nasdaq, depending on a company's market capitalization and
whether it is an Eligible New Listing or an Eligible Switch, the total
revised value of the services provided to Eligible Companies (including
the waiver of one-time fees) ranges from $364,800 to $1,533,000.\24\
---------------------------------------------------------------------------
\23\ Nasdaq states that these services are offered through
Nasdaq Corporate Solutions, LLC, an affiliate of Nasdaq, or a third-
party provider selected by Nasdaq. See id. at 43638.
\24\ See id. The exact values are set forth in proposed IM-5900-
7 and IM-5900-7A. Nasdaq states that, in describing the total value
of the services for companies that can select more than one market
advisory tool, Nasdaq presumes that a company would use stock
surveillance, which has an approximate retail value of $56,500, and
global targeting, which has an approximate retail value of $48,000.
See id. Nasdaq states that companies could select different
combinations of the three services offered with lower total
approximate retail values. See id.
---------------------------------------------------------------------------
Finally, Nasdaq proposes to simplify Nasdaq Rule IM-5900-7A by
cross-referencing the description of services and their values that
also appears in Nasdaq Rule IM-5900-7 and by deleting the descriptions
of offerings that are no longer available to any companies.\25\ Nasdaq
represents that no other company will be required to pay higher fees as
a result of the proposed amendments and that providing this service
will have no impact on the resources available for its regulatory
programs.\26\
---------------------------------------------------------------------------
\25\ As to the description of offerings being deleted from IM-
5900-7A, Nasdaq states that the services described in IM-5900-7A(c)
and (d)(1) were provided for a term of two years to companies that
listed before March 12, 2021. See id. at n. 13. Additionally, Nasdaq
states that no company still receives the services described in IM-
5900-7A(g), which applies only to companies that listed before April
23, 2018. See id. Nasdaq also proposes to revise the title of IM-
5900-7 to specify that the rule specifies the services offered to
certain newly listing companies listed on or after March 12, 2021.
See also supra note 14 and accompanying text.
\26\ See id. at 43638. Nasdaq also represents that the proposed
rule change will help ensure that individual listed companies are
not given specially negotiated packages of products or services to
list, or remain listed. See id.
---------------------------------------------------------------------------
III. Discussion and Commission's Findings
After careful review, the Commission finds that the proposed rule
change is consistent Section 6 of the Act.\27\ Specifically, the
Commission finds that the proposed rule change is consistent with
Sections 6(b)(4) and (5) of the Act,\28\ in particular, in that it is
designed to provide for the equitable allocation of reasonable dues,
fees, and other charges among Exchange members, issuers, and other
persons using the Exchange's facilities, and, in general to protect
investors and the public interest and is not designed to permit unfair
discrimination between customers, issuers, brokers, or dealers.
Moreover, the Commission believes that the proposed rule change is
consistent with Section 6(b)(8) of the Act,\29\ in that it does not
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
---------------------------------------------------------------------------
\27\ 15 U.S.C. 78f(b). 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).
\28\ 15 U.S.C. 78f(b)(4) and (5).
\29\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
The Commission believes that Nasdaq is responding to competitive
pressures in the market for listings in making this proposal. Nasdaq
states in its proposal that it faces competition in the market for
listing services and that it competes, in part, by offering
complimentary services to companies.\30\ Specifically, Nasdaq is
increasing the types of complimentary ESG services offered for certain
Eligible Switches that list on or after the effective date of the
proposed rule change. Nasdaq states that the Advanced ESG Services will
help eligible companies communicate with their shareholders and other
stakeholders by helping collect, store and disclose ESG data chosen by
the company and guiding messaging and reporting of that
information.\31\ Nasdaq also states that the services will help assess
the company's current ESG program, identify ESG risk and opportunities,
and establish strategies for risk management and opportunity
capture.\32\ In addition, Nasdaq states that no company is required to
use these complimentary services.\33\ Further, Nasdaq states that
offering different ESG services based on a company's market
capitalization is not unfairly discriminatory because larger companies
generally will need more and different ESG services and that those
issuers will likely bring greater future value to Nasdaq than other
issuers by switching to its market.\34\
---------------------------------------------------------------------------
\30\ See Notice, supra note 3, at 43638.
\31\ See id.
\32\ See id.
\33\ See id. at 43637.
\34\ See id. at 43639. The Exchange also states that companies
would more likely forego ESG services offered by their current
exchange given that NYSE offers ESG tools to currently listed
companies with 270 million or more total shares of common stock
outstanding, but not to companies with fewer shares outstanding. See
id. at 43638. See also NYSE Listed Company Manual Section 907.00.
---------------------------------------------------------------------------
As stated in the Commission's previous order approving Nasdaq Rule
IM-5900-7, Section 6(b)(5) of the Act does not require that all issuers
be treated the same; rather, the Act requires that the rules of an
exchange not unfairly discriminate between issuers.\35\ As the
Commission has previously found, it is reasonable for Nasdaq to provide
different services to tiers based on market capitalization since larger
capitalized companies generally will need and use more services.\36\
The Commission believes that it is reasonable and consistent with
Section 6(b)(5) of the Act for the Exchange to offer the new Advanced
ESG Services to Eligible Switches with a market
[[Page 64019]]
capitalization of $5 billion or more that list on or after the date of
approval of the proposed rule change. For the reasons stated above, the
Commission also believes that the proposal does not unfairly
discriminate among issuers and is therefore consistent with Section
6(b)(5) of the Act. In addition, the Commission believes that the
proposed rule reflects the current competitive environment for exchange
listings among national securities exchanges, and is appropriate and
consistent with Section 6(b)(8) of the Act.\37\
---------------------------------------------------------------------------
\35\ 15 U.S.C. 78f(b)(5); see also Securities Exchange Act
Release No. 65963 (December 15, 2011), 76 FR 79262, 79266 (December
21, 2011) (approving SR-NASDAQ-2011-122) (``2011 Approval Order'')
(``The Commission believes that Nasdaq has provided a sufficient
basis for its different treatment of Eligible Switches and that this
portion of Nasdaq's proposal meets the requirements of the Act in
that it reflects competition between exchanges, with Nasdaq offering
discounts for transfers of listings from a competing exchange.'').
See also Exchange Act Release No. 79366 (November 21, 2016), 81 FR
85663, 85665 (November 28, 2016) (approving SR-NASDAQ-2016-106)
(``2016 Approval Order'') (citing Securities Exchange Act Release
No. 65127 (August 12, 2011), 76 FR 51449, 51452 (August 18, 2011)
(approving SR-NYSE-2011-20) (``NYSE Approval Order'')).
\36\ See 2011 Approval Order, supra note 35, at 79266. As the
Commission previously stated, Nasdaq's rationale for treating NYSE
transfers differently from other types of transfers, including that
those issuers provided greater future value to Nasdaq through their
listing than do other issuers and that the issuers must forego
similar services provided by NYSE, among other factors, justified
such differential treatment. See id. As stated above Nasdaq,
provided similar rationale for only providing the Advanced ESG
Services to Eligible Switches with a market capitalization of $5
billion or more.
\37\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
Further, the Commission believes that describing in the Exchange's
rules the products and services available to Eligible Companies and
their associated values, as well as the length of time companies are
entitled to receive such services, will ensure that individual listed
companies are not given specially negotiated packages of products or
services to list, or remain listed, that would raise unfair
discrimination issues under the Act.\38\ The Commission has previously
found that the package of complimentary services offered to Eligible
Companies is equitably allocated among issuers consistent with Section
6(b)(4) of the Act and that describing the values of the services adds
greater transparency to the Exchange's rules and to the fees applicable
to such companies.\39\ As discussed above, the Commission believes that
adding the Advanced ESG Services to the complimentary services package
offered to Eligible Switches with a market capitalization of $5 billion
or more for Eligible Switches that list on or after the effective date
of the proposed rule change is consistent with Section 6(b)(5) of the
Act. As stated above, the Commission also believes that the proposal
does not unfairly discriminate among issuers and is therefore
consistent with Section 6(b)(5) of the Act. For similar reasons, the
Commission believes that the packages of complimentary services to be
offered pursuant to Nasdaq's proposal are equitably allocated among
issuers consistent with Section 6(b)(4) of the Act.
---------------------------------------------------------------------------
\38\ See 2016 Approval Order, supra note 35, at 85665 (citing
NYSE Approval Order, supra note 35, at 51452). The Commission notes
that Nasdaq represents that no other company will be required to pay
higher fees as a result of the proposal, that the proposal will have
no impact on the resources available for its regulatory programs,
and that the proposal will help to ensure that individual listed
companies are not given specially negotiated packages of products or
services to list, or remain listed. See supra note 26 and
accompanying text.
\39\ See 2016 Approval Order, supra note 35, at 85665; 2011
Approval Order, supra note 35, at 79266.
---------------------------------------------------------------------------
The Commission also believes that it is reasonable, and required by
Section 19(b) of the Act,\40\ that Nasdaq amend its rules to update the
products and services it offers to Eligible Companies contained in
Nasdaq Rules IM-5900-7 and IM-5900-7A, including the time periods for
which such products and services are offered and the commercial value
of such products and services. This provides greater transparency to
the Exchange's rules and the fees, and the value of complementary
products and services, applicable to Eligible Companies.
---------------------------------------------------------------------------
\40\ See Exchange Act Release No. 72669 (July 24, 2014), 79 FR
44234, 44236, n.39 (July 30, 2014) (SR-NASDAQ-2014-058) (``We would
expect Nasdaq, consistent with Section 19(b) of the Exchange Act, to
periodically update the retail values of services offered should
they change. This will help to provide transparency to listed
companies on the value of the free services they receive and the
actual costs associated with listing on Nasdaq.'').
---------------------------------------------------------------------------
Finally, the Commission finds that it is consistent with Section
6(b)(5) of the Act \41\ for Nasdaq to make various technical and
conforming revisions, as described above,\42\ to facilitate clarity of
its rules.
---------------------------------------------------------------------------
\41\ 15 U.S.C. 78f(b)(5).
\42\ See supra note 25 and accompanying text.
---------------------------------------------------------------------------
Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\43\ that the proposed rule change (SR-NASDAQ-2023-017) be, and it
hereby is, approved.
---------------------------------------------------------------------------
\43\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\44\
---------------------------------------------------------------------------
\44\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-20087 Filed 9-15-23; 8:45 am]
BILLING CODE 8011-01-P