83 FR 60522 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Eliminate Expired and Obsolete Provisions in Connection With Nasdaq's Transition to an All-Inclusive Annual Fee Program, Rename Certain Existing Annual Fees as All-Inclusive Annual Listing Fees, and Make Other Related Changes
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 227 (November 26, 2018)
Federal Register Volume 83, Issue 227 (November 26, 2018)
| Page Range | 60522-60526 | |
| FR Document | 2018-25736 |
[Federal Register Volume 83, Number 227 (Monday, November 26, 2018)] [Notices] [Pages 60522-60526] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-25736] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-84634; File No. SR-NASDAQ-2018-092] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Eliminate Expired and Obsolete Provisions in Connection With Nasdaq's Transition to an All-Inclusive Annual Fee Program, Rename Certain Existing Annual Fees as All-Inclusive Annual Listing Fees, and Make Other Related Changes November 20, 2018. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that, on November 13, 2018, 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 and II 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to eliminate expired and obsolete provisions in connection with Nasdaq's transition to an all-inclusive annual fee program for all listed companies effective January 1, 2018; clarify that Linked Securities, SEEDS, Other Securities and Exchange Traded Products are also subject to an all-inclusive annual fee applicable to such issues; and modify existing fee waiver rules related to listing transfers in light of differences between Nasdaq's all-inclusive annual fee and the listing fees of other exchanges. The text of the proposed rule change is available on the Exchange's website at http://nasdaq.cchwallstreet.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change 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 In 2014, Nasdaq adopted an all-inclusive annual listing fee schedule to simplify, clarify and enhance transparency around the annual fee to which listed companies are subject.\3\ The new annual fee schedule became operative on January 1, 2015, and applied to all companies listed after that date. Companies already listed at that time could voluntarily elect the new fee schedule, but were not then required to do so. Effective January 1, 2018, however, all listed companies became subject to the all-inclusive annual fee schedule and the standard annual fee schedule has ceased to have applicability or effect. --------------------------------------------------------------------------- \3\ Securities Exchange Act Release No. 73647 (November 19, 2014), 79 FR 70232 (November 25, 2014) (SR-NASDAQ-2014-87). --------------------------------------------------------------------------- Accordingly, as a result of the completion as of January 1, 2018, of the transition of all listed companies from the standard annual fee schedule to the all-inclusive annual fee schedule, Nasdaq is proposing to revise the listing rules to delete obsolete and out of date references to the standard annual fee schedule, the transition to the all-inclusive annual fee schedule, and other listing fees no longer in effect. In addition, Nasdaq is proposing other clarifying and conforming adjustments necessitated by completion of the transition, including relocating and renumbering revised rules as applicable. As of January 1, 2018, the all-inclusive annual listing fee program completely supersedes and replaces the standard annual fee, which is no longer applicable to any listed company.\4\ Accordingly, Nasdaq is proposing to [[Page 60523]] delete the obsolete language in Rules 5910(c)-(f) and 5920(c)-(e) that describes and sets forth the standard annual fee as well as language in IM-5900-1, IM-5900-4, IM-5900-5(b) and IM-5900-6 that refers to the standard annual fee and to rules about the standard annual fee that Nasdaq is proposing to delete. The all-inclusive annual listing fee program also encompasses the additional shares fee, which is also no longer applicable to any listed company. Thus, Nasdaq is proposing to delete Rules 5910(b) and 5920(b), which describe and set forth the additional shares fee. The all-inclusive annual listing fee program, however, does not encompass the annual fee for convertible debentures, which remains in effect. Therefore, Nasdaq is proposing to relocate the provision for the annual fee for convertible debentures, formerly in Rule 5920(c)(2), to new Rule 5920(b)(2)(F). --------------------------------------------------------------------------- \4\ Entry fees are not encompassed by the All-Inclusive Annual Listings Fee. Accordingly, Nasdaq is not proposing to revise or amend the entry fees set forth in the Rule 5900 Series. --------------------------------------------------------------------------- The provisions that refer to the transition from the standard annual fee to the all-inclusive annual listing fee program are also obsolete. Accordingly, to reflect completion of this transition, Nasdaq is proposing to delete references to the transition in IM-5900-6(b)(1), Rule 5901, and IM-5910-1 and IM-5920-1. With respect to the remaining provisions in IM-5910-1 and IM-5920-1, which relate to the all- inclusive annual listing fee, Nasdaq is proposing to relocate them to Rule 5910(b) and 5920(b). Therefore, as a result of these changes, the Exchange is also proposing to delete IM-5910-1 and IM-5920-1. Certain other fees previously applicable to listed companies have been superseded by the all-inclusive annual fee program. Accordingly, Nasdaq is proposing to delete references to these listing fees, which include the record-keeping fee, substitution listing fee, request for written interpretation fee, and compliance plan review fee. These fees are referenced in Rules 5250(e), 5250(e)(3)(A) and (B), 5250(e)(4), 5602(a)-(d), 5810(c)(2)(A), 5901, 5910(e) and (f), IM-5910-1(c), 5920(d) and (e), and IM-5920-1(c). Nasdaq also proposes to relocate into Rule 5602(a) provisions currently in Rule 5602(c) and (f), which specify that applicants and certain companies in the delisting process can request a written interpretation of the Listing Rules, and delete the provision for listed companies to request an expedited response in Rule 5602(b). To reflect the proposed changes to Rule 5602, Nasdaq is proposing to renumber the paragraphs of that rule that remain applicable. Nasdaq endeavors to respond to all requests for written interpretations of the Listing Rules in as timely a manner as possible. Thus, notwithstanding that Nasdaq is proposing to delete the provision for listed companies to request an expedited response to such requests, a Company may nonetheless request an expedited response and Nasdaq will respond as promptly as practicable. Listed companies, however, remain subject to the fees described in Rules 5815(a)(3) and 5820(a) that apply to review by a Hearings Panel or the Nasdaq Listing and Hearing Review Council, respectively, of a Staff Delisting Determination or Public Reprimand Letter. Listed companies also remain subject to the entry fees described in Rules 5910(a) and 5920(a) relating to the listing of an additional class of securities of the listed company.\5\ --------------------------------------------------------------------------- \5\ Listing Rules 5910(a) and 5920(a) provide that a Company that submits an application to list any class of its securities shall pay to Nasdaq an entry fee. Equity Investment Tracking Stocks listed pursuant to Rule 5222 are subject to the entry fees described in Rules 5910(a) and 5920(a). --------------------------------------------------------------------------- In addition, Nasdaq is proposing to renumber certain of the rules regarding the authority of the Nasdaq Board of Directors or its designee, in its discretion, to defer or waive all or any part of the annual fee prescribed therein. The authority to defer or waive the annual fee, which is currently set forth in Rules 5910(c)(2), 5910(d)(5), 5920(c)(4), 5930(b)(2) and 5940(b)(3) [sic], is generally exercised only in limited cases, under circumstances that are not likely to be frequently replicated and where requiring payment of an annual fee would be inequitable.\6\ To Nasdaq's knowledge, it has never used this authority to defer an annual fee. The Exchange represents it would do so only under the same circumstances as it would to waive an annual fee. --------------------------------------------------------------------------- \6\ For example, the Exchange granted a waiver to a company that was removed during the first week of January pursuant to a decision of a Nasdaq Listing Qualifications Panel, where the Panel had all the information necessary to make its decision in the prior year. The Exchange also granted a waiver to a company thet [sic] intended to voluntarily delist prior to the end of a calendar year but was delayed until early in January, where there was clear evidence of the company's intent to delist before the end of the year and there was limited trading prior to the delisting. In each of these cases, the Exchange believed it would be inequitable to subject the company to the annual fee. --------------------------------------------------------------------------- Because Nasdaq, as described above, is proposing to delete the language in Rules 5910(c)-(f) and 5920(c)-(e) that describes and sets forth the standard annual fee, which encompasses Rules 5910(c)(2), 5910(d)(5) and 5920(c)(4) that set forth the authority of the Nasdaq Board of directors or its designees to defer or waive all or any part of the annual fee, Nasdaq is proposing, without substantive changes, to renumber these rules in proposed new Rules 5910(b)(3)(G) and 5920(b)(3)(G) that apply to the all-inclusive annual listing fee.\7\ To fully reflect these proposed changes, Nasdaq is proposing to eliminate cross references to these rules and other similar provisions contained in IM-5900-1 and IM-5900-4. --------------------------------------------------------------------------- \7\ Nasdaq is not proposing to renumber Rules 5930(b)(2) and 5940(b)(3) [sic]. These rules remain unchanged by this proposal and the authority to defer or waive an annual fee set forth therein will continue to apply. --------------------------------------------------------------------------- Nasdaq is also proposing revisions to Rules 5930(b)(1) and 5940(b)(1) and (2) and to add new Rules 5930(b)(4) and 5940(b)(5) to provide that Linked Securities, SEEDS, Other Securities and Exchange Traded Products are subject to an all-inclusive annual listing fee applicable to such issues. Currently, Linked Securities, SEEDS, and Other Securities are subject to the annual fee set forth in Rule 5930(b) and Exchange Traded Products are subject to the annual fee set forth in Rule 5940(b). Previously, Nasdaq eliminated the fees for record-keeping changes and substitution listing events charged to these entities \8\ and they are not subject to the compliance plan or additional shares fees.\9\ Under these circumstances, and to promote clarity, consistency and uniformity, Nasdaq is proposing to rename the annual fee for Linked Securities, SEEDS, Other Securities and Exchange Traded Products to make clear that these securities are subject to an all-inclusive annual listing fee applicable to such issues.\10\ --------------------------------------------------------------------------- \8\ Securities Exchange Act Release No. 78047 (June 13, 2016), 81 FR 39736 (June 17, 2016) (SR-NASDAQ-2016-077). \9\ Rule 5810(c)(2)(A) currently does not require the compliance plan fee for plans submitted for failure to meet a continued listing standard contained in the Rule 5700 Series, which includes continued listing standards for those securities charged fees under Rules 5930 and 5940. \10\ Because Linked Securities, SEEDS, Other Securities and Exchange Traded Products are now subject to an all-inclusive annual listing fee applicable to such issues, consistent with the treatment of equity securities, Nasdaq proposes to no longer subject the issuer of these securities to the written interpretation fee. --------------------------------------------------------------------------- Nasdaq also proposes to remove a January 1, 2018 effective date contained in current IM-5910-1(d)(5) and IM-5920-1(d)(5) because that date has passed and these rules are now effective and to clarify that the annual fee referred to in those rules is the all-inclusive annual listing fee. Finally, given completion of Nasdaq's transition to the all- inclusive annual listing fee, Nasdaq is also proposing revisions to IM- 5900-4 to account for differences between Nasdaq's all- [[Page 60524]] inclusive annual fee and the fees of other listing exchanges. Specifically, IM-5900-4 currently provides for the waiver of a portion of the applicable annual fee for a company whose securities: (i) Are listed on a national securities exchange but not listed on Nasdaq, if the issuer of such securities transfers their listing exclusively to Nasdaq; or (ii) are listed on the New York Stock Exchange and Nasdaq, if the issuer of such securities ceases to maintain their listing on the New York Stock Exchange and the securities instead are designated under the plan governing Nasdaq securities. This waiver is provided as a pro-rated credit in the amount of any annual listing fees paid to the prior exchange applicable to the period of time after the transfer. The purpose of this waiver is to remove a disincentive for companies to switch markets when they had already paid an annual fee in that year.\11\ While Nasdaq's all-inclusive annual listing fee remains lower in most cases than the annual fee of competitor exchanges, in limited cases it can be higher than just the annual fee charged by a competitor exchange, which (unlike Nasdaq's all-inclusive annual listing fee) does not include fees that the competitor exchange separately charges for additional shares or other events such as record keeping changes or substitution listing events. To ensure uniform treatment and simplify application of this waiver given these structural differences between Nasdaq's all-inclusive annual fee and the potential range of other fees encompassed by the all-inclusive annual fee that a company may have also paid to the competitor exchange in the year of the switch in addition to the annual fee, Nasdaq proposes to modify the rule to waive the entire all-inclusive annual listing fee in the year of transfer. --------------------------------------------------------------------------- \11\ Securities Exchange Act Release No. 53696 (April 21, 2006), 71 FR 25273 (April 28, 2006) (SR-NASD-2006-47) (adopting the predecessor to IM-5900-4). --------------------------------------------------------------------------- Nasdaq acknowledges the possibility that the all-inclusive annual listing fee it charges may be higher in some cases than the annual fee charged by a competitor exchange and that in such cases an issuer that transfers its listing may receive a relatively greater benefit than other issuers that transfer their listings where the all-inclusive annual listing fee is lower than the annual fee charged by a competitor exchange. However, Nasdaq does not believe that this possibility is unfairly discriminatory. Nasdaq anticipates that there will be few instances where Nasdaq's all-inclusive annual listing fee is higher than the annual fee charged by a competitor exchange. Further, by simplifying these provisions, they are transparent to issuers and the public, ensure consistent application, and limit any unnecessary burdens related to the administration and implementation of these provisions. Nasdaq represents that this proposed modification will have no impact on the resources available for its regulatory programs or Nasdaq's ability to enforce its listing standards and protect investors. 2. Statutory Basis The Exchange believes that its proposal, by eliminating obsolete or unnecessary provisions from its rule book and, thus, simplifying and adding clarity to the fees charged by the Exchange, is consistent with Section 6(b) of the Act,\12\ in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\13\ in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using its facilities. For the same reasons, the Exchange also believes its proposal 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; and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78f(b). \13\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- Except as described below with respect to the proposed changes to IM-5900-4, the proposal does not change the listing fees to which listed companies are subject. Rather, Nasdaq is making this proposal to make certain the rules fully reflect completion of the phased transition from the standard annual fee schedule to the all-inclusive annual fee schedule. Completion of this transition rendered certain existing fee provisions obsolete, unnecessary or out of date and necessitated their deletion or modification. Completion of the transition also necessitated other clarifying and conforming adjustments, including relocating or renumbering certain rules. Nasdaq believes that updating Nasdaq's rules to eliminate obsolete provisions and make related clarifications and conforming changes will simplify Nasdaq's rule book and add transparency. As noted above, except as described below with respect to the changes to IM-5900-4, it will not change the listing fees to which listed companies are subject. Thus, the proposal does not reduce the resources available for Nasdaq's regulatory program or otherwise hinder or limit the ability of Nasdaq to enforce its listing standards and protect investors. The proposal's clarification in Rules 5930 and 5940 that Linked Securities, SEEDS, Other Securities and Exchange Traded Products are also subject to an all-inclusive annual fee applicable to such issues is similarly consistent with Section 6(b) of the Act. In this regard, by adding clarity to the rules regarding the fees applicable to these products, the proposal simplifies and adds transparency to Nasdaq's rule book, including by fully reflecting the fact that, as noted above, these products are not subject to fees for Record Keeping, Substitution Listing Events and compliance plans.\14\ This proposed change does not change the listing fees to which these products are subject. Instead, it ensures the rules reflect that these products, like all other listings, are subject to an all-inclusive annual fee. --------------------------------------------------------------------------- \14\ See, supra, notes 8 and 9. --------------------------------------------------------------------------- Also, because the proposal does not change the fees to which these listings are subject, the proposal does not reduce the resources available for Nasdaq's regulatory program or otherwise hinder or limit the ability of Nasdaq to enforce its listing standards and protect investors. As such, Nasdaq believes these changes are consistent with the Section 6(b)(4) of the Act in that they provide for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using its facilities. For the same reasons, they are also consistent with the investor protection objectives of Section 6(b)(5) of the Act. The proposed modifications to IM-5900-4 are similarly consistent with the Act because they are designed to simplify and clarify application of the pre-existing annual fee waiver to companies that transfer their listing from a national securities exchange to Nasdaq or, if they are already listed on Nasdaq, cease to be listed on the New York Stock Exchange. This change was necessitated because the all- inclusive annual fee schedule may not, in certain cases, be directly equivalent or comparable to other listing exchanges' annual fees because it includes a range of fees, such as for listing additional shares, record keeping changes and substitution listing events, that other listing exchanges charge separately in addition to an annual listing fee. As such, while most companies under the all-inclusive annual fee schedule incur lower fees in comparison to the annual [[Page 60525]] fee charged by other exchanges, in some cases a company's fee under the all-inclusive annual fee schedule may be higher. In these cases, the existing waiver under the rules of a pro rata portion of the annual fee paid to the other listing exchange may not give the company full credit for other fees paid to the other exchange and may not completely remove the disincentive to transferring listing attributable to the fact that the company has already paid the annual fee for that year. Under the proposed change, all companies switching their listing will have the entire annual fee waived in the year of the switch. As noted above, Nasdaq acknowledges the possibility that the all- inclusive annual listing fee it charges may be higher in some cases than the annual fee charged by a competitor exchange and that in such cases an issuer that transfers its listing may receive a relatively greater benefit than other issuers that transfer their listings where the all-inclusive annual listing fee is lower than the annual fee charged by a competitor exchange. However, for several reasons, Nasdaq does not believe that this possibility is unfairly discriminatory. First, Nasdaq anticipates that there will be few instances where Nasdaq's all-inclusive annual listing fee is higher than the annual fee charged by a competitor exchange. Second, as described above, the waiver is intended to remove a disincentive to transfer and Nasdaq does not believe that the possibility that the all-inclusive annual listing fee is higher than the annual fee charged by a competitor exchange would have a material impact on a decision to transfer or not. Third, by simplifying these provisions, they are transparent to issuers and the public, ensure consistent application, and limit any unnecessary burdens related to the administration and implementation of these provisions. For these reasons, Nasdaq believes that this proposed change is consistent with Section 6(b)(4) of the Act. Nasdaq also believes this proposed change is similarly consistent with Section 6(b)(5) of the Act 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 is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. Further, given the limited number of listings transfers each year, it is not expected that this waiver would materially impact the resources available for Nasdaq's regulatory program or otherwise hinder or limit the ability of Nasdaq to enforce its listing standards and protect investors. As such, Nasdaq believes these changes are consistent with the investor protection objectives of Section 6(b)(5) of the Act. 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. The market for listing services is extremely competitive and listed companies may freely choose alternative venues based on the aggregate fees assessed and the value provided by each listing. As such, because this proposal does not change the listing fees to which listed companies are subject, but merely reflects the completion of the phased transition from the prior standard annual fee schedule to the all-inclusive annual listing fee schedule, the application of an all-inclusive annual listing fee schedule to Linked Securities, SEEDS, Other Securities and Exchange Traded Products, and refinement and clarification of the operation of certain existing waivers based on the introduction of the all-inclusive listing fee schedule, Nasdaq believes that this proposed rule change does not encumber the competition for listings with other listing venues, which are similarly free to set their fees. Rather, it reflects the competition among listing venues and will further enhance such 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) of the Act \15\ and Rule 19b- 4(f)(6) thereunder.\16\ --------------------------------------------------------------------------- \15\ 15 U.S.C. 78s(b)(3)(A). \16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 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. --------------------------------------------------------------------------- A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act \17\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \18\ permits the Commission to 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 its rules may fully reflect completion of the transition to the all- inclusive annual fee program, thereby providing clarity to this fee program and making the rule book simpler and more transparent. The Exchange represents that, as of January 1, 2018, all listed companies are subject to the all-inclusive annual listing fee program, which has completely superseded and replaced the standard annual fee. For these reasons, the Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the operative delay and designates the proposal as operative upon filing.\19\ --------------------------------------------------------------------------- \17\ 17 CFR 240.19b-4(f)(6). \18\ 17 CFR 240.19b-4(f)(6)(iii). \19\ For purposes only of waiving the 30-day operative delay, the Commission also has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- 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. 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 CommentsUse the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NASDAQ-2018-092 on the subject line. [[Page 60526]] Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File Number SR-NASDAQ-2018-092. 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 (http://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 such 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-2018-092, and should be submitted on or before December 17, 2018. --------------------------------------------------------------------------- \20\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\20\ Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-25736 Filed 11-23-18; 8:45 am] BILLING CODE 8011-01-P
![60522 Federal Register / Vol. 83, No. 227 / Monday, November 26, 2018 / Notices
redemptions, and Deposit Instruments For the Commission, by the Division of II. Self-Regulatory Organization’s
and Redemption Instruments will be Investment Management, under delegated Statement of the Purpose of, and
valued in the same manner as those authority. Statutory Basis for, the Proposed Rule
investment positions currently held by Eduardo A. Aleman, Change
the Funds. Applicants also seek relief Assistant Secretary.
In its filing with the Commission, the
from the prohibitions on affiliated [FR Doc. 2018–25594 Filed 11–23–18; 8:45 am] Exchange included statements
transactions in section 17(a) to permit a BILLING CODE 8011–01–P concerning the purpose of and basis for
Fund to sell its shares to and redeem its the proposed rule change and discussed
shares from a Fund of Funds, and to any comments it received on the
engage in the accompanying in-kind SECURITIES AND EXCHANGE proposed rule change. The text of these
transactions with the Fund of Funds.3 COMMISSION statements may be examined at the
The purchase of Creation Units by a [Release No. 34–84634; File No. SR– places specified in Item IV below. The
Fund of Funds directly from a Fund will NASDAQ–2018–092] Exchange has prepared summaries, set
be accomplished in accordance with the forth in sections A, B, and C below, of
policies of the Fund of Funds and will Self-Regulatory Organizations; The the most significant aspects of such
be based on the NAVs of the Funds. Nasdaq Stock Market LLC; Notice of statements.
9. Applicants also request relief to Filing and Immediate Effectiveness of
permit a Feeder Fund to acquire shares Proposed Rule Change To Eliminate A. Self-Regulatory Organization’s
of another registered investment Expired and Obsolete Provisions in Statement of the Purpose of, and
company managed by the Adviser Connection With Nasdaq’s Transition Statutory Basis for, the Proposed Rule
having substantially the same to an All-Inclusive Annual Fee Change
investment objectives as the Feeder Program, Rename Certain Existing 1. Purpose
Fund (‘‘Master Fund’’) beyond the Annual Fees as All-Inclusive Annual
In 2014, Nasdaq adopted an all-
limitations in section 12(d)(1)(A) and Listing Fees, and Make Other Related
inclusive annual listing fee schedule to
permit the Master Fund, and any Changes
simplify, clarify and enhance
principal underwriter for the Master
November 20, 2018. transparency around the annual fee to
Fund, to sell shares of the Master Fund
Pursuant to Section 19(b)(1) of the which listed companies are subject.3
to the Feeder Fund beyond the
Securities Exchange Act of 1934 The new annual fee schedule became
limitations in section 12(d)(1)(B).
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 operative on January 1, 2015, and
10. Section 6(c) of the Act permits the applied to all companies listed after that
notice is hereby given that, on
Commission to exempt any persons or date. Companies already listed at that
November 13, 2018, The Nasdaq Stock
transactions from any provision of the time could voluntarily elect the new fee
Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’)
Act if such exemption is necessary or schedule, but were not then required to
filed with the Securities and Exchange
appropriate in the public interest and do so. Effective January 1, 2018,
Commission (‘‘SEC’’ or ‘‘Commission’’)
consistent with the protection of however, all listed companies became
the proposed rule change as described
investors and the purposes fairly subject to the all-inclusive annual fee
in Items I and II below, which Items
intended by the policy and provisions of schedule and the standard annual fee
have been prepared by the Exchange.
the Act. Section 12(d)(1)(J) of the Act schedule has ceased to have
The Commission is publishing this
provides that the Commission may applicability or effect.
notice to solicit comments on the
exempt any person, security, or Accordingly, as a result of the
proposed rule change from interested
transaction, or any class or classes of completion as of January 1, 2018, of the
persons.
persons, securities, or transactions, from transition of all listed companies from
any provision of section 12(d)(1) if the I. Self-Regulatory Organization’s the standard annual fee schedule to the
exemption is consistent with the public Statement of the Terms of Substance of all-inclusive annual fee schedule,
interest and the protection of investors. the Proposed Rule Change Nasdaq is proposing to revise the listing
Section 17(b) of the Act authorizes the The Exchange proposes to eliminate rules to delete obsolete and out of date
Commission to grant an order expired and obsolete provisions in references to the standard annual fee
permitting a transaction otherwise connection with Nasdaq’s transition to schedule, the transition to the all-
prohibited by section 17(a) if it finds an all-inclusive annual fee program for inclusive annual fee schedule, and other
that (a) the terms of the proposed all listed companies effective January 1, listing fees no longer in effect. In
transaction are fair and reasonable and 2018; clarify that Linked Securities, addition, Nasdaq is proposing other
do not involve overreaching on the part SEEDS, Other Securities and Exchange clarifying and conforming adjustments
of any person concerned; (b) the Traded Products are also subject to an necessitated by completion of the
proposed transaction is consistent with all-inclusive annual fee applicable to transition, including relocating and
the policies of each registered such issues; and modify existing fee renumbering revised rules as applicable.
investment company involved; and (c) waiver rules related to listing transfers As of January 1, 2018, the all-
the proposed transaction is consistent in light of differences between Nasdaq’s inclusive annual listing fee program
with the general purposes of the Act. all-inclusive annual fee and the listing completely supersedes and replaces the
fees of other exchanges. standard annual fee, which is no longer
3 The requested relief would apply to direct sales
The text of the proposed rule change applicable to any listed company.4
of shares in Creation Units by a Fund to a Fund of
Funds and redemptions of those shares. Applicants,
is available on the Exchange’s website at Accordingly, Nasdaq is proposing to
moreover, are not seeking relief from section 17(a) http://nasdaq.cchwallstreet.com, at the
for, and the requested relief will not apply to, principal office of the Exchange, and at 3 Securities Exchange Act Release No. 73647
transactions where a Fund could be deemed an the Commission’s Public Reference (November 19, 2014), 79 FR 70232 (November 25,
Affiliated Person, or a Second-Tier Affiliate, of a 2014) (SR–NASDAQ–2014–87).
Fund of Funds because an Adviser or an entity
Room. 4 Entry fees are not encompassed by the All-
controlling, controlled by or under common control Inclusive Annual Listings Fee. Accordingly, Nasdaq
1 15 U.S.C. 78s(b)(1).
with an Adviser provides investment advisory is not proposing to revise or amend the entry fees
services to that Fund of Funds. 2 17 CFR 240.19b–4. set forth in the Rule 5900 Series.
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![Federal Register / Vol. 83, No. 227 / Monday, November 26, 2018 / Notices 60523
delete the obsolete language in Rules as possible. Thus, notwithstanding that without substantive changes, to
5910(c)–(f) and 5920(c)–(e) that Nasdaq is proposing to delete the renumber these rules in proposed new
describes and sets forth the standard provision for listed companies to Rules 5910(b)(3)(G) and 5920(b)(3)(G)
annual fee as well as language in IM– request an expedited response to such that apply to the all-inclusive annual
5900–1, IM–5900–4, IM–5900–5(b) and requests, a Company may nonetheless listing fee.7 To fully reflect these
IM–5900–6 that refers to the standard request an expedited response and proposed changes, Nasdaq is proposing
annual fee and to rules about the Nasdaq will respond as promptly as to eliminate cross references to these
standard annual fee that Nasdaq is practicable. rules and other similar provisions
proposing to delete. The all-inclusive Listed companies, however, remain contained in IM–5900–1 and IM–5900–
annual listing fee program also subject to the fees described in Rules 4.
encompasses the additional shares fee, 5815(a)(3) and 5820(a) that apply to Nasdaq is also proposing revisions to
which is also no longer applicable to review by a Hearings Panel or the Rules 5930(b)(1) and 5940(b)(1) and (2)
any listed company. Thus, Nasdaq is Nasdaq Listing and Hearing Review and to add new Rules 5930(b)(4) and
proposing to delete Rules 5910(b) and Council, respectively, of a Staff 5940(b)(5) to provide that Linked
5920(b), which describe and set forth Delisting Determination or Public Securities, SEEDS, Other Securities and
the additional shares fee. The all- Reprimand Letter. Listed companies Exchange Traded Products are subject to
inclusive annual listing fee program, also remain subject to the entry fees an all-inclusive annual listing fee
however, does not encompass the described in Rules 5910(a) and 5920(a) applicable to such issues. Currently,
annual fee for convertible debentures, relating to the listing of an additional Linked Securities, SEEDS, and Other
which remains in effect. Therefore, class of securities of the listed Securities are subject to the annual fee
Nasdaq is proposing to relocate the company.5 set forth in Rule 5930(b) and Exchange
provision for the annual fee for In addition, Nasdaq is proposing to Traded Products are subject to the
convertible debentures, formerly in Rule renumber certain of the rules regarding annual fee set forth in Rule 5940(b).
5920(c)(2), to new Rule 5920(b)(2)(F). the authority of the Nasdaq Board of Previously, Nasdaq eliminated the fees
The provisions that refer to the Directors or its designee, in its for record-keeping changes and
transition from the standard annual fee discretion, to defer or waive all or any substitution listing events charged to
to the all-inclusive annual listing fee part of the annual fee prescribed these entities 8 and they are not subject
program are also obsolete. Accordingly, therein. The authority to defer or waive to the compliance plan or additional
to reflect completion of this transition, the annual fee, which is currently set shares fees.9 Under these circumstances,
Nasdaq is proposing to delete references forth in Rules 5910(c)(2), 5910(d)(5), and to promote clarity, consistency and
to the transition in IM–5900–6(b)(1), 5920(c)(4), 5930(b)(2) and 5940(b)(3) uniformity, Nasdaq is proposing to
Rule 5901, and IM–5910–1 and IM– [sic], is generally exercised only in rename the annual fee for Linked
5920–1. With respect to the remaining limited cases, under circumstances that Securities, SEEDS, Other Securities and
provisions in IM–5910–1 and IM–5920– are not likely to be frequently replicated Exchange Traded Products to make clear
1, which relate to the all-inclusive and where requiring payment of an that these securities are subject to an all-
annual listing fee, Nasdaq is proposing annual fee would be inequitable.6 To inclusive annual listing fee applicable to
to relocate them to Rule 5910(b) and Nasdaq’s knowledge, it has never used such issues.10
5920(b). Therefore, as a result of these this authority to defer an annual fee. Nasdaq also proposes to remove a
changes, the Exchange is also proposing The Exchange represents it would do so January 1, 2018 effective date contained
to delete IM–5910–1 and IM–5920–1.
only under the same circumstances as it in current IM–5910–1(d)(5) and IM–
Certain other fees previously
would to waive an annual fee. 5920–1(d)(5) because that date has
applicable to listed companies have
been superseded by the all-inclusive Because Nasdaq, as described above, passed and these rules are now effective
annual fee program. Accordingly, is proposing to delete the language in and to clarify that the annual fee
Nasdaq is proposing to delete references Rules 5910(c)–(f) and 5920(c)–(e) that referred to in those rules is the all-
to these listing fees, which include the describes and sets forth the standard inclusive annual listing fee.
record-keeping fee, substitution listing annual fee, which encompasses Rules Finally, given completion of Nasdaq’s
fee, request for written interpretation 5910(c)(2), 5910(d)(5) and 5920(c)(4) transition to the all-inclusive annual
fee, and compliance plan review fee. that set forth the authority of the Nasdaq listing fee, Nasdaq is also proposing
These fees are referenced in Rules Board of directors or its designees to revisions to IM–5900–4 to account for
5250(e), 5250(e)(3)(A) and (B), defer or waive all or any part of the differences between Nasdaq’s all-
5250(e)(4), 5602(a)–(d), 5810(c)(2)(A), annual fee, Nasdaq is proposing,
7 Nasdaq is not proposing to renumber Rules
5901, 5910(e) and (f), IM–5910–1(c), 5 Listing 5930(b)(2) and 5940(b)(3) [sic]. These rules remain
Rules 5910(a) and 5920(a) provide that
5920(d) and (e), and IM–5920–1(c). a Company that submits an application to list any unchanged by this proposal and the authority to
Nasdaq also proposes to relocate into class of its securities shall pay to Nasdaq an entry defer or waive an annual fee set forth therein will
Rule 5602(a) provisions currently in fee. Equity Investment Tracking Stocks listed continue to apply.
8 Securities Exchange Act Release No. 78047
Rule 5602(c) and (f), which specify that pursuant to Rule 5222 are subject to the entry fees
described in Rules 5910(a) and 5920(a). (June 13, 2016), 81 FR 39736 (June 17, 2016) (SR–
applicants and certain companies in the 6 For example, the Exchange granted a waiver to NASDAQ–2016–077).
delisting process can request a written a company that was removed during the first week 9 Rule 5810(c)(2)(A) currently does not require the
interpretation of the Listing Rules, and of January pursuant to a decision of a Nasdaq compliance plan fee for plans submitted for failure
delete the provision for listed Listing Qualifications Panel, where the Panel had to meet a continued listing standard contained in
all the information necessary to make its decision the Rule 5700 Series, which includes continued
companies to request an expedited listing standards for those securities charged fees
in the prior year. The Exchange also granted a
response in Rule 5602(b). To reflect the waiver to a company thet [sic] intended to under Rules 5930 and 5940.
proposed changes to Rule 5602, Nasdaq voluntarily delist prior to the end of a calendar year 10 Because Linked Securities, SEEDS, Other
is proposing to renumber the paragraphs but was delayed until early in January, where there Securities and Exchange Traded Products are now
of that rule that remain applicable. was clear evidence of the company’s intent to delist subject to an all-inclusive annual listing fee
before the end of the year and there was limited applicable to such issues, consistent with the
Nasdaq endeavors to respond to all trading prior to the delisting. In each of these cases, treatment of equity securities, Nasdaq proposes to
requests for written interpretations of the Exchange believed it would be inequitable to no longer subject the issuer of these securities to the
the Listing Rules in as timely a manner subject the company to the annual fee. written interpretation fee.
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![60526 Federal Register / Vol. 83, No. 227 / Monday, November 26, 2018 / Notices
Paper Comments Extension: Form 18 SEC File No. 270–105, SECURITIES AND EXCHANGE
OMB Control No. 3235–0121. COMMISSION
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities Notice is hereby given that, pursuant Proposed Collection; Comment
and Exchange Commission, 100 F Street to the Paperwork Reduction Act of 1995 Request
NE, Washington, DC 20549–1090. (44 U.S.C. 3501 et seq.), the Securities
All submissions should refer to File and Exchange Commission Upon Written Request Copies Available
Number SR–NASDAQ–2018–092. This (‘‘Commission’’) is soliciting comments From: Securities and Exchange
file number should be included on the on the collection of information Commission, Office of FOIA Services,
subject line if email is used. To help the summarized below. The Commission 100 F Street NE, Washington, DC
Commission process and review your plans to submit this existing collection 20549–2736
comments more efficiently, please use of information to the Office of Extension:
only one method. The Commission will Management and Budget for extension Form T–2 SEC File No. 270–122, OMB
post all comments on the Commission’s and approval. Control No. 3235–0111
internet website (http://www.sec.gov/
Form 18 (17 CFR 249.218) is a Notice is hereby given that, pursuant
rules/sro.shtml). Copies of the
registration form used by a foreign to the Paperwork Reduction Act of 1995
submission, all subsequent
government or political subdivision to (44 U.S.C. 3501 et seq.), the Securities
amendments, all written statements
register securities for listing on a U.S. and Exchange Commission
with respect to the proposed rule
exchange. The information collected is (‘‘Commission’’) is soliciting comments
change that are filed with the
intended to ensure that the information on the collection of information
Commission, and all written
required by the Commission to be filed summarized below. The Commission
communications relating to the
permits verification of compliance with plans to submit this existing collection
proposed rule change between the
securities law requirements and assures of information to the Office of
Commission and any person, other than
the public availability of the Management and Budget for extension
those that may be withheld from the
information. Form 18 takes and approval.
public in accordance with the
provisions of 5 U.S.C. 552, will be approximately 8 hours per response and Form T–2 (17 CFR 269.2) is a
available for website viewing and statement of eligibility of an individual
is filed by approximately 5 respondents
printing in the Commission’s Public trustee under the Trust Indenture Act of
for a total of 40 annual burden hours (8
Reference Room, 100 F Street NE, 1939. The information is used to
hours per response x 5 responses).
Washington, DC 20549 on official determine whether the individual is
Written comments are invited on: (a) qualified to serve as a trustee under the
business days between the hours of Whether this proposed collection of
10:00 a.m. and 3:00 p.m. Copies of such indenture. Form T–2 takes
information is necessary for the proper approximately 9 hours per response to
filing also will be available for
performance of the functions of the prepare and is filed by 9 respondents.
inspection and copying at the principal
agency, including whether the We estimate that 25% of the 9 burden
office of the Exchange. All comments
information will have practical utility; hours (2 hours per responses) is
received will be posted without change.
Persons submitting comments are (b) the accuracy of the agency’s estimate prepared by the filer for a total reporting
cautioned that we do not redact or edit of the burden imposed by the collection burden of 18 hours (2 hours per
personal identifying information from of information; (c) ways to enhance the response × 9 responses).
comment submissions. You should quality, utility, and clarity of the Written comments are invited on: (a)
submit only information that you wish information collected; and (d) ways to Whether this proposed collection of
to make available publicly. All minimize the burden of the collections information is necessary for the
submissions should refer to File of information on respondents, performance of the functions of the
Number SR–NASDAQ–2018–092, and including through the use of automated agency, including whether the
should be submitted on or before collection techniques or other forms of information will have practical utility;
December 17, 2018. information technology. Consideration (b) the accuracy of the agency’s estimate
will be given to comments and of the burden imposed by the collection
For the Commission, by the Division of of information; (c) ways to enhance the
Trading and Markets, pursuant to delegated
suggestions submitted in writing within
60 days of this publication. quality, utility, and clarity of the
authority.20
information collected; and (d) ways to
Eduardo A. Aleman, An agency may not conduct or
minimize the burden of the collection of
Assistant Secretary. sponsor, and a person is not required to
information on respondents, including
[FR Doc. 2018–25736 Filed 11–23–18; 8:45 am] respond to, a collection of information
through the use of automated collection
BILLING CODE 8011–01–P
unless it displays a currently valid techniques or other forms of information
control number. technology. Consideration will be given
Please direct your written comments to comments and suggestions submitted
SECURITIES AND EXCHANGE to Charles Riddle, Acting Director/Chief in writing within 60 days of this
COMMISSION Information Officer, Securities and publication.
Exchange Commission, c/o Candace An agency may not conduct or
Proposed Collection; Comment
Kenner, 100 F Street, NE, Washington, sponsor, and a person is not required to
Request
DC 20549 or send an email to: PRA_ respond to, a collection of information
Upon Written Request Copies Available Mailbox@sec.gov. unless it displays a currently valid
From: Securities and Exchange Dated: November 20, 2018. control number.
Commission, Office of FOIA Services, Please direct your written comment to
Eduardo A. Aleman,
100 F Street NE, Washington, DC Charles Riddle, Acting Director/Chief
20549–2736 Assistant Secretary. Information Officer, Securities and
[FR Doc. 2018–25682 Filed 11–23–18; 8:45 am] Exchange Commission, c/o Candace
20 17 CFR 200.30–3(a)(12). BILLING CODE 8011–01–P Kenner, 100 F Street NE, Washington,
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Document Created: 2018-11-24 00:51:41
Document Modified: 2018-11-24 00:51:41
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