[Federal Register Volume 75, Number 74 (Monday, April 19, 2010)]
[Notices]
[Pages 20415-20417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-8947]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61887; File No. SR-NASDAQ-2010-041]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Make Conforming Changes to Certain Notification Requirements
April 12, 2010.
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 March 26, 2010, The NASDAQ Stock Market LLC (``Nasdaq'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I and II below, which Items have been
prepared by Nasdaq. Nasdaq has designated the proposed rule change as
effecting a change described under Rule 19b-4(f)(6) under the Act,\3\
which renders the proposal effective upon filing with the Commission.
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.
\3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
Nasdaq proposes to modify the Listing Rules to make conforming
changes to certain notification requirements.
The text of the proposed rule change is below. Proposed new
language is in italic; 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://nasdaq.cchwallstreet.com.
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5250. Obligations for Companies Listed on The Nasdaq Stock Market
(a) No change.
(b) Obligation to Make Public Disclosure
(1) No change.
(2) As set forth in Rule 5810(b), a Company that receives a
notification of deficiency from Nasdaq is required to make a public
announcement by filing a Form 8-K, where required by SEC rules, or by
issuing a press release disclosing receipt of the notification and the
Rule(s) upon which the deficiency is based. However, note that in the
case of a deficiency related to the requirement to file a periodic
report contained in Rule 5250(c)(1) or (2), the Company is required to
make the public announcement by issuing a press release. As described
in Rule 5250(b)(1) and IM-5250-1, [notice to the] the Company must
notify Nasdaq's MarketWatch Department [must be made] about the
announcement through the electronic disclosure submission system
available at www.nasdaq.net, except in emergency situations when
notification may instead be provided by telephone or facsimile. If the
public announcement is made during Nasdaq market hours, the Company
must notify MarketWatch at least ten minutes prior to the [public]
announcement. If the public announcement is made outside of Nasdaq
market hours, the Company must notify MarketWatch of the announcement
prior to 6:50 a.m. ET.
(c)-(f) No change.
* * * * *
5810. Notification of Deficiency by the Listing Qualifications
Department
When the Listing Qualifications Department determines that a
Company does not meet a listing standard set forth in the Rule 5000
Series, it will immediately notify the Company of the deficiency. As
explained in more detail below, deficiency notifications are of four
types:
(1)-(4) No change.
Notifications of deficiencies that allow for submission of a
compliance plan or an automatic cure or compliance period may result,
after review of the compliance plan or expiration of the cure or
compliance period, in issuance of a Staff Delisting Determination or a
Public Reprimand Letter.
(a) No change.
(b) Company Disclosure Obligations
A Company that receives a notification of deficiency, Staff
Delisting Determination, or Public Reprimand Letter is required to make
a public announcement disclosing receipt of the notification and the
Rule(s) upon which the deficiency is based. A Company that receives a
notification of deficiency or Staff Delisting Determination related to
the requirement to file a periodic report contained in Rule 5250(c)(1)
or (2) is required to make the public announcement by issuing a press
release disclosing receipt of the notification and the Rule(s) upon
which the deficiency is based, in addition to filing any Form 8-K
required by SEC rules. In all other cases, the Company may make the
public announcement either by filing a Form 8-K, where required by SEC
rules, or by issuing a press release. [Before release of the public
announcement, Companies must provide a copy of the announcement to
Nasdaq's MarketWatch Department.] As described in Rule 5250(b)(1) and
IM-5250-1, [notice to the] the Company must notify Nasdaq's MarketWatch
Department [must be made] about the announcement through the electronic
disclosure submission system available at www.nasdaq.net, except in
emergency situations when notification may instead be provided by
telephone or facsimile. If the public announcement is made during
Nasdaq market hours, the Company must notify MarketWatch at least ten
minutes prior to the [public] announcement. If the public announcement
is made outside of Nasdaq market hours, the Company must notify
MarketWatch of the announcement prior to 6:50 a.m. ET. The Company
should make the public announcement as promptly as possible but not
more than four business days following receipt of the notification.
(c)-(d) No change.
* * * * *
5840. Adjudicatory Process: General Information
(a)-(j) No change.
(k) Disclosure of Public Reprimand Letter
A Company that receives an Adjudicatory Body Decision that serves
as a Public Reprimand Letter must make a public announcement by filing
a Form 8-K, where required by SEC rules, or by issuing a press release
disclosing the receipt of the Decision, including the Rule(s) upon
which the Decision was based. [Prior to the release of the public
announcement, the Company must provide such disclosure to Nasdaq's
MarketWatch Department.] As described in Rule 5250(b)(1) and IM-5250-1,
[notice to the] the Company must notify Nasdaq's MarketWatch Department
[must be made] about the announcement through the electronic disclosure
submission system available at www.nasdaq.net, except in emergency
situations when notification may instead be provided by telephone or
facsimile. If the public announcement is made during Nasdaq market
hours, the Company must notify MarketWatch at least ten minutes prior
to the [public] announcement. If the public announcement is made
outside of Nasdaq market hours, the Company must notify MarketWatch of
the announcement prior to 6:50 a.m. ET. The Company should make the
public announcement [should be made] as
[[Page 20416]]
promptly as possible[,] but not more than four business days following
receipt of the Decision.
* * * * *
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 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. 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 recently adopted changes to certain of its press release
requirements for Nasdaq-listed companies (the ``Press Release
Filing'').\5\ Subsequent to Nasdaq's filing and the Commission's
publication of this proposal,\6\ Nasdaq made an immediately effective
change to its rules to clarify when listed companies must provide
notification to Nasdaq of material information disclosed outside of
market hours.\7\ As revised, when the material information is made
public outside of Nasdaq market hours, Nasdaq companies must provide
notification of the information to MarketWatch by 6:50 a.m. ET. Nasdaq
proposes to make conforming changes to the rules modified in the Press
Release Filing, such that Rules 5250(b)(2), 5810(b) and 5840(k) would
each specify that if a required public announcement is made during
market hours, the company must notify Nasdaq's MarketWatch Department
at least ten minutes prior to making the announcement to the public;
otherwise the company must notify the MarketWatch Department prior to
6:50 am ET. Nasdaq also proposes to clarify that companies are not
required to use the electronic disclosure submission system to notify
MarketWatch in emergency situations, when notification may instead be
provided by telephone or facsimile.\8\ Finally, Nasdaq proposes to make
other non-substantive changes to these rules so that they each use
consistent language.
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\5\ Securities Exchange Act Release No. 61713 (March 15, 2010),
75 FR 13629 (March 22, 2010) (SR-NASDAQ-2010-006).
\6\ Securities Exchange Act Release No. 61461 (February 1,
2010), 75 FR 6241 (February 8, 2010) (SR-NASDAQ-2010-006).
\7\ Securities Exchange Act Release No. 61521 (February 16,
2010), 75 FR 8156 (February 23, 2010) (SR-NASDAQ-2010-008).
\8\ IM-5250-1 already provides that companies do not have to use
the electronic disclosure submission system in an emergency
situation and provides examples of emergency situations, such as the
lack of computer or internet access, technical problems, and cases
where no draft disclosure document is available.
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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 Sections
6(b)(5) of the Act,\10\ in particular in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, 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. The proposed change will
conform Nasdaq's notification requirements in the rules amended in the
Press Release Filing with Nasdaq's notification requirements for the
disclosure of material information, thereby reducing confusion among
listed companies and investors.
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\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(5).
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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.
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
Because the proposed rule change: (i) Does not significantly affect
the protection of investors or the public interest; (ii) does not
impose any significant burden on competition; and (iii) does not become
operative for 30 days after the date of the filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest, the proposed rule change has
become effective pursuant to Section 19(b)(3)(A) of the Act \11\ and
Rule 19b-4(f)(6) thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii)
under the Act, the Exchange is required 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.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \13\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \14\ 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 requested that the Commission waive the 30-day operative delay.
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiver of the operative delay is
consistent with the protection of investors and the public interest
because the proposed rule change would merely conform Rules 5250(b)(2),
5810(b) and 5840(k) to the notification requirements when companies
release material information outside of market hours in Nasdaq's other
rules,\15\ thereby reducing company and investor confusion. As such,
the Commission believes that the proposed rule change raises no new
regulatory issues. Additionally, Nasdaq's clarification that in
emergencies, companies are not required to notify MarketWatch through
the electronic disclosure system but may do so via telephone or
facsimile aligns the rules to the existing requirements of Nasdaq Rule
5250(b)(1) and IM-5250-1, further reducing confusion for companies.\16\
For these reasons, the Commission designates that the proposed rule
change become operative immediately upon filing.\17\
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\15\ See Nasdaq Rule 5250(b)(1) and IM-5250-1.
\16\ See supra note 8.
\17\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate the 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.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing,
[[Page 20417]]
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 e-mail to [email protected]. Please include
File No. SR-NASDAQ-2010-041 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File No. SR-NASDAQ-2010-041. 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 Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of NASDAQ. All 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 No. SR-NASDAQ-2010-041 and should be
submitted on or before May 10, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-8947 Filed 4-16-10; 8:45 am]
BILLING CODE 8011-01-P