

[Federal Register: September 5, 2006 (Volume 71, Number 171)]
[Notices]               
[Page 52351-52356]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05se06-57]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54378; File No. SR-NASDAQ-2006-032]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To 
Revise The Nasdaq Capital Market Listing Requirements

EFFECTIVE DATE: August 28, 2006.
    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 August 23, 2006, The NASDAQ Stock Market LLC (``Nasdaq''), filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II, and III below, which 
Items have been prepared by Nasdaq. On August 28, 2006, Nasdaq filed 
Amendment No. 1 to the proposed rule change.\3\ The

[[Page 52352]]

Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, Nasdaq makes clarifying changes to the 
rule text in the Nasdaq Capital Market convertible debt listing 
standards. Nasdaq also makes clarifying changes to the purpose 
section regarding convertible debt, rights and warrants, and non-
Canadian foreign securities and American Depository Receipts.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    Nasdaq proposes to revise certain listing requirements applicable 
to the Nasdaq Capital Market. The text of the proposed rule change is 
below. Proposed new language is in italics; proposed deletions are in 
[brackets].\4\
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    \4\ Changes are marked to the rule text that appears in the 
electronic manual of Nasdaq found at http://www.complinet.com/nasdaq.
 These rules became effective on August 1, 2006, when Nasdaq 

commenced operations as a national securities exchange for Nasdaq-
listed securities. The rule text incorporates changes made by 
Amendment No. 1. See id.
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* * * * *

4200. Definitions.

    (a) For purposes of the Rule 4000 Series, unless the context 
requires otherwise:
    (1) No change.
    (2) [Reserved
    (3) Reserved
    (4)] ``Best efforts offering'' means an offering of securities by 
members of a selling group under an agreement which imposes no 
financial commitment on the members of such group to purchase any such 
securities except as they may elect to do so.
    [(5) Reserved
    (6) ``Cash available for distribution'' means cash flow of a 
limited partnership less amount set aside for restoration or creation 
of reserves.]
    [(7)] (3) ``Cash flow'' means cash funds provided from limited 
partnership operations, including lease payments on net leases from 
builders and sellers, without deduction for depreciation, but after 
deducting cash funds used to pay all other expenses, debt payments, 
capital improvements and replacements.
    [(8)] (4) ``Consolidated Quotations Service'' (CQS) means the 
consolidated quotation collection system for securities listed on an 
exchange other than Nasdaq implementing SEC Rule 602.
    [(9)] (5) ``Country of Domicile'' means the country under whose 
laws an issuer is organized or incorporated.
    (6) ``Covered security'' means a security described in Section 
18(b) of the Securities Act of 1933.
    (7) Reserved
    (8) Reserved
    (9) Reserved
    (10)--(39) No change.
    (b)--(c) No change.
* * * * *

4310. Listing Requirements for Domestic and Canadian Securities

    To qualify for listing in Nasdaq, a security of a domestic or 
Canadian issuer shall satisfy all applicable requirements contained in 
paragraphs (a), (b), and (c) hereof. Issuers that meet these 
requirements, but that are not listed on the Nasdaq Global Market, are 
listed on the Nasdaq Capital Market.
    (a) No change.
    (b) No change.
    (c) In addition to the requirements contained in paragraph (a) and 
(b) above, and unless otherwise indicated, a security shall satisfy the 
following criteria for listing on Nasdaq:
    (1) No change
    (2)[(A)] For initial listing, the issuer shall have either:
    (A) (i) stockholders' equity of $5 million; and
    (ii) a market value of publicly held shares of $15 million; and
    (iii) an operating history of at least two years; or
    (B) [(ii)] (i) stockholders' equity of $4 million; and
    (ii) market value of listed securities of $50 million (currently 
traded issuers must meet this requirement and the bid price requirement 
under Rule 4310(c)(4) for 90 consecutive trading days prior to applying 
for listing); [or] and
    (iii) a market value of publicly held shares of $15 million; or
    (C) [(iii)] (i) stockholders' equity of $4 million; and
    (ii) net income from continuing operations of $750,000 in the most 
recently completed fiscal year or in two of the last three most 
recently completed fiscal years; and
    (iii) a market value of publicly held shares of $5 million.
    [(B)] (3) For continued listing, the issuer shall maintain either:
    (A) [(i)] stockholders' equity of $2.5 million; or
    (B) [(ii)] market value of listed securities of $35 million; or
    (C) [(iii)] net income from continuing operations of $500,000 in 
the most recently completed fiscal year or in two of the last three 
most recently completed fiscal years.
    [(3) For initial listing, the issuer shall have an operating 
history of at least one year or a market value of listed securities of 
$50 million.]
    (4) No change.
    (5) (A) In the case of a convertible debt security, for initial 
listing, there shall be a principal amount outstanding of at least $10 
million.
    (B) In addition, for the initial listing of convertible debt, one 
of the following conditions must be satisfied:
    (i) the issuer of the debt must have an equity security that is 
listed on Nasdaq, the American Stock Exchange or the New York Stock 
Exchange;
    (ii) an issuer whose equity security is listed on Nasdaq, the 
American Stock Exchange or the New York Stock Exchange, directly or 
indirectly owns a majority interest in, or is under common control 
with, the issuer of the debt security, or has guaranteed the debt 
security;
    (iii) a nationally recognized securities rating organization (an 
``NRSRO'') has assigned a current rating to the debt security that is 
no lower than an S&P Corporation ``B'' rating or equivalent rating by 
another NRSRO; or,
    (iv) if no NRSRO has assigned a rating to the issue, an NRSRO has 
currently assigned: (1) an investment grade rating to an immediately 
senior issue; or (2) a rating that is no lower than an S&P Corporation 
``B'' rating, or an equivalent rating by another NRSRO, to a pari passu 
or junior issue.
    (C) For continued listing of a convertible debt security, there 
shall be a principal amount outstanding of at least $5 million.
    (6)(A) In the case of common stock, for initial and continued 
listing, there shall be at least 300 round lot holders of the security.
    (B) In the case of preferred stock and secondary classes of common 
stock, for initial and continued listing, there shall be at least 100 
round lot holders of the security, provided in each case that the 
issuer's common stock or common stock equivalent equity security [is] 
must be listed on [either] Nasdaq or [another national securities 
exchange] be a covered security. In the event the issuer's common stock 
or common stock equivalent security either is not listed on [either] 
Nasdaq or [another national securities exchange] is not a covered 
security, the preferred stock and/or secondary class of common stock 
may be listed on Nasdaq so long as the security satisfies the listing 
criteria for common stock.
    (C) No change.
    (7)(A) In the case of common stock, there shall be at least 
1,000,000 publicly held shares for initial listing and 500,000 publicly 
held shares for continued listing. For initial listing such shares 
shall have a market value [of at least $5 million] as provided in the 
applicable provision of Rule 4310(c)(2). For continued listing such 
shares shall

[[Page 52353]]

have a market value of at least $1 million.
    (B) In the case of preferred stock and secondary classes of common 
stock, there shall be at least 200,000 publicly held shares having a 
market value of at least $[2] 3.5 million for initial listing and 
100,000 publicly held shares having a market value of [$500,000] $1 
million for continued listing. In addition, the issuer's common stock 
or common stock equivalent security must be listed on [either] Nasdaq 
or [another national securities exchange] be a covered security. In the 
event the issuer's common stock or common stock equivalent security 
either is not listed on [either] Nasdaq or [another national securities 
exchange] is not a covered security, the preferred stock and/or 
secondary class of common stock may be traded on Nasdaq so long as the 
security satisfies the listing criteria for common stock.
    (C) Shares held directly or indirectly by any officer or director 
of the issuer and by any person who is the beneficial owner of more 
than 10 percent of the total shares outstanding are not considered to 
be publicly held.
    (8) No change.
    (9)(A) In the case of rights and warrants, for initial listing 
only, there shall be at least [100,000] 400,000 issued and the 
underlying security [shall] must be listed on Nasdaq or [another 
national securities exchange] be a covered security. For continued 
listing, the underlying security must remain listed on Nasdaq or be a 
covered security.
    (B) In the case of put warrants (that is, instruments that grant 
the holder the right to sell to the issuing company a specified number 
of shares of the Company's common stock, at a specified price until a 
specified period of time), for initial listing only, there shall be at 
least [100,000] 400,000 issued and the underlying security [shall] must 
be listed on Nasdaq or [another national securities exchange] be a 
covered security. For continued listing, the underlying security must 
remain listed on Nasdaq or be a covered security.
    (C) No change.
    (10)-(30) No change.
    (d) No change.

4320. Listing Requirements for Non-Canadian Foreign Securities and 
American Depositary Receipts

    To qualify for listing on Nasdaq, a security of a non-Canadian 
foreign issuer, an American Depositary Receipt (ADR) or similar 
security issued in respect of a security of a foreign issuer shall 
satisfy the requirements of paragraphs (a), (b), and (e) of this Rule. 
Issuers that meet these requirements, but that are not listed on the 
Nasdaq Global Market, are listed on the Nasdaq Capital Market.
    (a)-(d) No change.
    (e) In addition to the requirements contained in paragraphs (a) and 
(b), the security shall satisfy the criteria set out in this subsection 
for listing on Nasdaq. In the case of ADRs, the underlying security 
will be considered when determining the ADR's qualification for initial 
or continued listing on Nasdaq.
    (1) No change.
    (2)(A) For initial listing, the issue shall meet the requirements 
of Rule 4310(c)(2)(A), (B) or (C). [have a minimum bid price of $4 and 
the issuer shall have:
    (i) stockholders' equity of U.S. $5 million;
    (ii) market value of listed securities of U.S. $50 million 
(currently traded issuers must meet this requirement for 90 consecutive 
trading days prior to applying for listing); or
    (iii) net income from continuing operations of U.S. $750,000 in the 
most recently completed fiscal year or in two of the last three most 
recently completed fiscal years.]
    (B) For continued listing, the issuer shall meet the requirements 
of Rule 4310(c)(3)(A), (B) or (C). [maintain:
    (i) stockholders' equity of U.S. $2.5 million;
    (ii) market value of listed securities of U.S. $35 million; or
    (iii) net income from continuing operations of U.S. $500,000 in the 
most recently completed fiscal year or in two of the last three most 
recently completed fiscal years.]
    (C) No change.
    (D) No change.
    (E) No change.
    (3)(A) In the case of a convertible debt security, for initial 
listing, there shall be a principal amount outstanding of at least $10 
million.
    (B) In addition, for the initial listing of convertible debt, one 
of the following conditions must be satisfied:
    (i) the issuer of the debt must have an equity security that is 
listed on Nasdaq, the American Stock Exchange or the New York Stock 
Exchange;
    (ii) an issuer whose equity security is listed on Nasdaq, the 
American Stock Exchange or the New York Stock Exchange, directly or 
indirectly owns a majority interest in, or is under common control 
with, the issuer of the debt security, or has guaranteed the debt 
security;
    (iii) a nationally recognized securities rating organization (an 
``NRSRO'') has assigned a current rating to the debt security that is 
no lower than an S&P Corporation ``B'' rating or equivalent rating by 
another NRSRO; or,
    (iv) if no NRSRO has assigned a rating to the issue, an NRSRO has 
currently assigned: (1) an investment grade rating to an immediately 
senior issue; or (2) a rating that is no lower than an S&P Corporation 
``B'' rating, or an equivalent rating by another NRSRO, to a pari passu 
or junior issue.
    (C) For continued listing of a convertible debt security, there 
shall be a principal amount outstanding of at least $5 million.
    (4)(A) [There] In the case of common stock, for initial and 
continued listing, there shall be at least 300 round lot holders of the 
security.
    (B) In the case of preferred stock and secondary classes of common 
stock, for initial and continued listing, there shall be at least 100 
round lot holders of the security, provided in each case that the 
issuer's common stock or common stock equivalent equity security [is] 
must be listed on [either] Nasdaq or [another national securities 
exchange] be a covered security. In the event the issuer's common stock 
or common stock equivalent security either is not listed on [either] 
Nasdaq or [another national securities exchange] is not a covered 
security, the preferred stock and/or secondary class of common stock 
may be listed on Nasdaq so long as the security satisfies the listing 
criteria for common stock.
    (C) No change.
    (5) There shall be at least 1,000,000 publicly held shares for 
initial listing and 500,000 publicly held shares for continued listing. 
For initial listing, such shares shall have a market value [of at least 
$5 million] as provided in the applicable provision of Rule 4310(c)(2). 
For continued listing, such shares shall have a market value of at 
least $1 million. In the case of preferred stock and secondary classes 
of common stock, there shall be at least 200,000 publicly held shares 
having a market value of at least [$2] $3.5 million for initial listing 
and 100,000 publicly held shares having a market value of [$500,000] $1 
million for continued listing. In addition, the issuer's common stock 
or common stock equivalent security security must be listed on either 
Nasdaq or [another national securities exchange] be a covered security. 
In the event the issuer's common stock or common stock equivalent 
security either is not listed on [either] Nasdaq or [another national 
securities exchange] is not a covered security, the preferred stock 
and/or secondary class of common stock may be traded on Nasdaq so long 
as the security satisfies the listing criteria for common stock. Shares 
held directly or

[[Page 52354]]

indirectly by any officer or director of the issuer and by any person 
who is the beneficial owner of more than 10 percent of the total shares 
outstanding are not considered to be publicly held.
    (6) In the case of rights, warrants and ADRs for initial listing 
only, at least [100,000] 400,000 shall be issued. Issuers of ADRs must 
also meet the round lot holders and publicly held shares requirements 
set forth in the applicable provisions of Rules 4310(c)(2), 4320(e)(4) 
and 4320(e)(5) [subsections (4) and (5) above].
    (7) In the case of rights and warrants, for initial and continued 
listing, the underlying security shall be listed on Nasdaq or [another 
national securities exchange] be a covered security.
    (8)-(26) No change.
    (f) No change.
* * * * *

IM-4803. Staff Review of Deficiency

    As provided in Rule 4803(a)(1)(A), the staff of the Listing 
Department may accept a plan to regain compliance with respect to 
quantitative deficiencies from standards that do not themselves provide 
a compliance period. Such standards include:
    Rules [4310(c)(2)(B)(i) and (iii)] 4310(c)(3)(A) and 4310(c)(3)(C)
    Rule 4310(c)(6)
    Rule 4310(c)(7) (but only as to the number of publicly held shares, 
and not as to such shares' market value)
    [Rules 4320(e)(2)(B)(i) and (iii)]
    Rule 4320(e)(2)(B) 
    Rules 4320(e)(4) and (5) (but only as to the number of publicly 
held shares, and not as to such shares' market value)
    Rules 4450(a)(1), (3), and (4)
    Rules 4450(b)(1)(B), (b)(2), and (b)(5), and
    Rules 4450(h)(1) and (4).
    In a case where an issuer fails to comply with the requirement of 
Rules [4310(c)(2)(B)(iii), 4320(e)(2)(B)(iii),] 4310(c)(3)(C) or 
4450(b)(1)(B), the Listing Department shall not accept a plan to 
achieve compliance with those requirements in the future, since 
compliance requires stated levels of net income or assets and revenues 
during completed fiscal years and therefore can only be demonstrated 
through audited financial statements. Similarly, an issuer may not 
submit a plan relying on partial-year performance to demonstrate 
compliance with these standards. An issuer cited for non-compliance 
with these requirements may, however, submit a plan that demonstrates 
current or near-term compliance with Rules [4310(c)(2)(B)(i), 
4320(e)(2)(B)(i),] 4310(c)(3)(A) or 4450(a)(3) (i.e., the alternative 
listing requirement relating to stockholders' equity), or Rules 
[4310(c)(2)(B)(ii), 4320(e)(2)(B)(ii),] 4310(c)(3)(B) or 4450(b)(1)(A) 
(i.e., the alternative listing requirement relating to market value of 
listed securities).
* * * * *

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

    In its filing with the Commission, Nasdaq included statements 
concerning the purpose of, and basis for, the proposed rule change, as 
amended, and discussed any comments it received on the proposed rule 
change, as amended. The text of these statements may be examined at the 
places specified in Item IV below. Nasdaq has prepared summaries, set 
forth in Sections A, B, and C below, of the most significant aspects of 
such statements.

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

1. Purpose
    Nasdaq proposes to increase the initial and continued listing 
requirements applicable to companies seeking to list, or already 
listed, on the Nasdaq Capital Market, as set forth in Rule 4310 (for 
domestic and Canadian securities) and Rule 4320 (for non-Canadian 
foreign securities and American Depositary Receipts).\5\ Nasdaq 
believes that these changes will facilitate a finding by the Commission 
that the listing standards for the Capital Market are substantially 
similar to the listing standards applicable to securities listed on the 
New York Stock Exchange, the American Stock Exchange, or the Nasdaq 
Global Market. This finding is required before the Commission can 
designate securities listed on the Capital Market as ``covered 
securities,'' which are exempt from state regulation under Section 18 
of the Securities Act of 1933 (``Securities Act'').\6\
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    \5\ See Amendment No. 1, supra note 3.
    \6\ 15 U.S.C. 77r(b).
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Primary Listing Standards

    The Exchange states that currently, a company can list on the 
Capital Market by meeting a stockholders' equity, income or market 
value of listed securities requirement, along with other applicable 
listing standards. Nasdaq proposes to modify the income and market 
value of listed securities components of these listing standards to 
also require a minimum of $4 million in equity in each case. In 
addition, for companies listing under the equity alternative, Nasdaq 
proposes to require a two year operating history, instead of the one 
year history currently required. Further, for companies listing under 
the market value of listed securities and equity alternatives, Nasdaq 
proposes to increase the market value of publicly held shares 
requirement for initial listing from $5 million to $15 million. 
Finally, Nasdaq proposes to clarify that all companies must have 300 
round lot shareholders for continued listing of a primary class of 
common stock.

Secondary Classes of Common Stock and Preferred Stock

    Nasdaq states that it currently permits the listing of secondary 
classes of common stock and preferred stock on the Capital Market under 
lower liquidity standards, when the primary class of common stock is 
listed on Nasdaq or a national securities exchange. Nasdaq proposes to 
increase the market value of publicly held shares requirement from $2 
million to $3.5 million for initial listing and from $500,000 to $1 
million for continued listing of these securities. In addition, Nasdaq 
proposes to modify the listing standards so that the lower liquidity 
standards are available only when a company's common stock or its 
equivalent is listed on Nasdaq or is a ``covered security'' as defined 
in Section 18 of the Securities Act. Finally, Nasdaq proposes to 
clarify that companies must have 100 round lot shareholders for 
continued listing under these listing standards.

Rights and Warrants

    Nasdaq proposes to increase the requirement for initial listing of 
rights and warrants to require that there be 400,000 outstanding. In 
addition, Nasdaq proposes to require that for initial and continued 
listing, the security underlying a right or warrant must be listed on 
Nasdaq or be a covered security.\7\
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    \7\ See Amendment No. 1, supra note 3.
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Convertible Debt

    Nasdaq states that its rules currently permit the listing of 
convertible debt on the Capital Market. Nasdaq proposes to modify those 
rules, to require that for the initial listing of convertible debt 
either that: (i) The issuer of the debt must have an equity security 
that is listed on Nasdaq, the American Stock Exchange or the New York 
Stock Exchange; (ii) an issuer whose equity security is listed on 
Nasdaq, the American Stock Exchange or the New York Stock Exchange, 
directly or indirectly owns a majority interest in, or is under common 
control with, the

[[Page 52355]]

issuer of the debt security, or has guaranteed the debt security; (iii) 
a nationally recognized securities rating organization (an ``NRSRO'') 
has assigned a current rating to the debt security that is no lower 
than an S&P Corporation ``B'' rating or equivalent rating by another 
NRSRO; or, (iv) if no NRSRO has assigned a rating to the issue, an 
NRSRO has currently assigned: (1) An investment grade rating to an 
immediately senior issue; or (2) a rating that is no lower than an S&P 
Corporation ``B'' rating, or an equivalent rating by another NRSRO, to 
a pari passu or junior issue.\8\
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    \8\ See Amendment No. 1, supra note 3.
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Other Changes

    Nasdaq also proposes to make technical and conforming changes to 
the rules by adding a definition of ``covered security'' in Rule 4200, 
deleting certain other definitions in Rule 4200 that have no current 
applicability under Nasdaq rules, and adjusting cross references 
contained in IM-4803.\9\
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    \9\ Nasdaq notes that the references to Rule 4320 in the final 
paragraph of IM-4803 have been deleted based on the new structure of 
the rules. Nonetheless, the substance of this interpretive material 
continues to apply to non-U.S. companies in the same manner that it 
applies to domestic companies due to the cross reference to Rule 
4310(c)(3) contained in Rule 4320(e)(2)(B).
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Implementation

    Nasdaq states that it recognizes that the proposed changes could 
result in a security that currently meets all the listing requirements 
becoming non-compliant. Therefore, Nasdaq proposes that the changes to 
the continued listing requirements be made effective 30 days \10\ after 
the proposed rule change is approved by the Commission. Nasdaq believes 
that this period would provide currently-listed companies with adequate 
time to comply.
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    \10\ See Amendment No. 1, supra note 3.
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    In the case of companies applying for initial listing, Nasdaq 
proposes that the new requirements be effective upon approval for 
companies that apply after the date this proposed rule change is 
submitted to the SEC. Nasdaq states that companies that had applied for 
listing prior to the date this proposed rule change is submitted to the 
SEC would be able to continue to qualify under the prior standards, 
provided that they complete the listing process not later than 30 days 
\11\ after the proposed rule change is approved by the Commission. 
Companies that apply after the date this proposed rule change is 
submitted to the SEC would be approved for listing based on the rules 
in effect at the time of the approval. The Exchange believes that this 
schedule provides notice to companies applying for listing that they 
would be subject to higher standards upon approval of the rule, so such 
companies would not be prejudiced, but recognizes that companies that 
have previously applied did so in reliance on the prior listing 
standards, and therefore provides them a reasonable period of time to 
complete the listing process on that basis.
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    \11\ See Amendment No. 1, supra note 3.
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    The Exchange states that these procedures are similar to those used 
when the listing standards were revised in 1997 and 2001.\12\
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    \12\ See Securities Exchange Act Release Nos. 38961 (August 22, 
1997), 62 FR 45895 (Aug. 29, 1997) (approving SR-NASD-1997-16); and 
44499 (June 29, 2001), 66 FR 35819 (July 9, 2001) (approving SR-
NASD-2001-14).
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2. Statutory Basis
    Nasdaq believes that the proposed rule change, as amended, is 
consistent with the provisions of Section 6 of the Act \13\ in general 
and with Section 6(b)(5) of the Act,\14\ in particular. Section 6(b)(5) 
requires that Nasdaq's rules be designed to promote just and equitable 
principles of trade, to remove impediments to and perfect the mechanism 
of a free and open market, and to protect investors and the public 
interest. The Exchange believes that the proposed rule change, as 
amended, would raise the listing standards on the Nasdaq Capital 
Market, which will help protect investors. Further, Nasdaq believes 
that the proposed rule change will facilitate the Commission's review 
of Nasdaq's petition to treat securities listed on the Capital Market 
as covered securities under Section 18(b) of the Securities Act,\15\ 
which would remove an impediment to the mechanism of a free and open 
market.\16\
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    \13\ 15 U.S.C. 78f.
    \14\ 15 U.S.C. 78f(b)(5).
    \15\ 15 U.S.C. 77r(b).
    \16\ Petition to Amend Rule 146(b) to Designate Securities 
Listed on the Nasdaq Capital Market as Covered Securities for the 
Purpose of Section 18 of the Securities Act of 1933 (February 28, 
2006) (designated as Commission File No. 4-513, available at: http://www.sec.gov/rules/petitions/petn4-513.pdf
).

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B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change, as amended, 
will result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.

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

    Written comments were neither solicited nor received.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding, or (ii) as to 
which Nasdaq consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be 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, as amended, is consistent with the Act. Comments may be 
submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to rule-comments@sec.gov. Please include 

File Number SR-NASDAQ-2006-032 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2006-032. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (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 inspection 
and copying in the Commission's Public Reference Room. Copies of such 
filing also will be available for inspection and copying at the 
principal office of Nasdaq. All

[[Page 52356]]

comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly.
    All submissions should refer to File Number SR-NASDAQ-2006-032 and 
should be submitted on or before September 26, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-14651 Filed 9-1-06; 8:45 am]

BILLING CODE 8010-01-P
