
[Federal Register Volume 83, Number 248 (Friday, December 28, 2018)]
[Notices]
[Pages 67374-67376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28181]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84880; File No. SR-NASDAQ-2018-103]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the Exchange's All-Inclusive Annual Listing Fees for American 
Depositary Receipts

December 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 December 11, 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, II, and III below, which Items have been prepared by the 
Exchange. The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Exchange's all-inclusive annual 
listing fees for American Depositary Receipts.
    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
    The purpose of the proposed rule change is to modify the Exchange's 
all-

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inclusive annual listing fees for American Depositary Receipts.
    Currently, ADRs listed on Nasdaq pay an all-inclusive annual fee 
based on the number of shares they have outstanding, which ranges from 
$37,000 to $45,000 on the Capital Market and from $45,000 to $75,000 on 
the Global and Global Select Markets.\3\ Nasdaq proposes to amend the 
all-inclusive annual fee for ADRs in Listing Rules 5910(b)(2)(B) and 
5290(b)(2)(B) to the following amounts, effective January 1, 2019:
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    \3\ See Listing Rules 5910(b)(2)(B) and 5920(b)(2)(B). 
Specifically, on the Capital Market, the all-inclusive annual fee 
for companies listing ADRs with up to 10 million ADRs and other 
listed equity securities outstanding (collectively ``Securities 
Outstanding'') is $37,000 and for companies with over 10 million 
Securities Outstanding it is $45,000. On the Global Market and 
Global Select Market, the all-inclusive annual fee for companies 
listing ADRs with up to 50 million Securities Outstanding is 
$45,000, for companies with 50+ to 75 million Securities Outstanding 
it is $52,500, and for companies with over 75 million Securities 
Outstanding it is $75,000.

Global/Global Select Markets:
    Up to 10 million ADRs and other listed equity securities..   $45,000
    10+ to 50 million ADRs and other listed equity securities.   $50,000
    50+ to 75 million ADRs and other listed equity securities.   $60,000
    Over 75 million ADRs and other listed equity securities...   $80,000
Capital Market:
    Up to 10 million ADRs and other listed equity securities..   $42,000
    Over 10 million ADRs and other listed equity securities...   $50,000
 

    Under the revised fee schedule, companies that list ADRs will pay 
the same minimum fee as other companies listing equity securities on 
the same tier of Nasdaq. Nasdaq believes that it is appropriate to 
charge ADRs the same minimum fees as other companies because these 
minimum fees reflect the minimum value of a Nasdaq listing and Nasdaq 
does not believe that this minimum value differs for companies listing 
ADRs: They trade on the same trading platform, are subject to the 
substantially the same regulatory oversight, and receive the same 
listing services as other companies. To effect this change, Nasdaq will 
create a new fee tier on the Global and Global Select Markets for 
companies with more than 10 million but not more than 50 million ADRs 
and other listed equity securities outstanding. The all-inclusive 
annual fee for companies on the Global and Global Select Markets with 
10 million or fewer ADRs and other listed equity securities will remain 
at $45,000, which is the same as the minimum all-inclusive annual fee 
for other companies listing up to 10 million equity securities on the 
Global and Global Select Markets.\4\ On the Capital Market, the all-
inclusive annual fee for companies with 10 million or fewer ADRs and 
other listed equity securities will be increased to $45,000 [sic],\5\ 
which is the same as the minimum all-inclusive annual fee for other 
companies listing up to 10 million equity securities on the Capital 
Market.\6\
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    \4\ See Listing Rule 5910(b)(2)(A).
    \5\ The Commission notes that this reference to $45,000 is an 
error in Nasdaq's description of its proposed rule change and, in 
accordance with the proposed rule text and as described correctly 
above, the all-inclusive annual fee for companies on the Capital 
Market with 10 million or fewer ADRs and other listed equity 
securities will be increased to $42,000.
    \6\ See Listing Rule 5920(b)(2)(A).
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    The all-inclusive annual fees for all other companies listing ADRs 
on Nasdaq will also increase to reflect the value of the listing, 
although such fees will remain lower than the fees paid by other 
domestic and foreign companies listing equity securities.\7\ Nasdaq 
believes it is appropriate to charge companies that list ADRs lower 
fees than companies that list common stock or ordinary shares, once 
they have reached the minimum fee. For many companies that list ADRs 
Nasdaq is not the primary listing and therefore the lower fee serves as 
an incentive to list or maintain their listing. In addition, issuers of 
ADRs are not subject to all of the same regulatory requirements as 
other companies and therefore Nasdaq's regulatory costs to list these 
companies is lower.\8\
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    \7\ The all-inclusive annual fee for common stock and ordinary 
shares ranges from $42,000 to $75,000 on the Capital Market and from 
$45,000 to $155,000 on the Global and Global Select Markets. See 
Listing Rules 5910(b)(2)(A) and 5920(b)(2)(A).
    \8\ Because ADRs can only be issued by foreign private issuers, 
their issuers may rely on exemptions to certain corporate governance 
rules. See Listing Rule 5615(a)(3) and IM-5615-3. In addition, ADRs 
are not subject to the requirement to notify Nasdaq prior to certain 
share issuances. See Listing Rule 5250(e)(2).
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    While these changes are effective upon filing, Nasdaq has 
designated the proposed amendments to be operative on January 1, 2019.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\9\ in general and with Section 
6(b)(4) and (5) of the Act,\10\ in particular in that it provides for 
the equitable allocation of reasonable dues, fees, and other charges 
among its members, issuers and other persons using its facilities and 
does not unfairly discriminate between customers, issuers, brokers or 
dealers.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4) and (5).
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    The proposed fee change is an equitable allocation of reasonable 
fees because it will better align the all-inclusive annual fees paid by 
companies listing ADRs with the fees paid by other Nasdaq-listed 
companies and with the value that such a listing provides to the 
company. Specifically, under the proposed rule change, the minimum all-
inclusive annual fee for companies that list ADRs would be the same 
minimum fees as are paid by other companies, which Nasdaq believes is 
reasonable and an equitable allocation of fees because companies that 
list ADRs receive the same services and trade on the same trading 
platform as other companies. For the same reason, Nasdaq also believes 
that it is an equitable allocation of reasonable fees to raise the fees 
paid by companies that list more ADRs than are included in the minimum 
fee tier because that change will result in fees that are closer to the 
fees paid by other companies listing the same number of securities.
    Under the proposed fee schedule, the all-inclusive annual fee for 
companies that list more ADRs than the minimum fee tier will be lower 
than the fee charged to other companies. Further, the difference 
between the fees charged a company that lists ADRs and a company that 
lists other equity securities increases when there are more shares 
outstanding. Because companies that list ADRs also typically have 
primary trading on another market, and because companies that list ADRs 
are not subject to all of Nasdaq's governance and notification 
requirements and therefore Nasdaq's regulatory costs for such companies 
can be lower,\11\ Nasdaq believes that it is an equitable allocation of 
reasonable fees, and not unfairly discriminatory to charge lower fees 
beyond the minimum fee tier and to have a lower maximum fee for ADRs 
than for other companies listing equity securities.
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    \11\ See footnote 8, supra.
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    Finally, NASDAQ notes that it operates in a highly competitive 
market in which market participants can readily switch exchanges if 
they deem the listing fees excessive.\12\ In such an environment, 
NASDAQ must

[[Page 67376]]

continually review its fees to assure that they remain competitive.
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    \12\ The Justice Department has noted the intense competitive 
environment for exchange listings. See ``NASDAQ OMX Group Inc. and 
IntercontinentalExchange Inc. Abandon Their Proposed Acquisition Of 
NYSE Euronext After Justice Department Threatens Lawsuit'' (May 16, 
2011), available at http://www.justice.gov/atr/public/press_releases/2011/271214.htm.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change will result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended. The market for 
listing services is extremely competitive and listed companies may 
freely choose alternative venues, both within the U.S. and 
internationally. For this reason, Nasdaq does not believe that the 
proposed rule change will result in any burden on competition for 
listings.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\13\
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    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2018-103 on the subject line.

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-2018-103. 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-2018-103, and should be submitted 
on or before January 18, 2019.
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    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Brent J. Fields,
Secretary.
[FR Doc. 2018-28181 Filed 12-27-18; 8:45 am]
 BILLING CODE 8011-01-P


