[Federal Register Volume 86, Number 49 (Tuesday, March 16, 2021)]
[Notices]
[Pages 14484-14493]
[FR Doc No: 2021-05343]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91286; File Nos. SR-NASDAQ-2020-081; SR-NASDAQ-2020-
082]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing of Amendments No. 1 and Order Instituting Proceedings
To Determine Whether To Approve or Disapprove Proposed Rule Changes, as
Modified by Amendments No. 1, To Adopt Listing Rules Related to Board
Diversity and To Offer Certain Listed Companies Access to a
Complimentary Board Recruiting Solution To Help Advance Diversity on
Company Boards

March 10, 2021.

I. Introduction

    On December 1, 2020, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to adopt listing rules related to board diversity
(``Board Diversity Proposal''). The proposed rule change was published
for comment in the Federal Register on December 11, 2020.\3\ On January
19, 2021, pursuant to Section 19(b)(2) of the Act,\4\ the Commission
designated a longer period within which to approve the proposed rule
change, disapprove the proposed rule change, or institute proceedings
to determine whether to disapprove the proposed rule change.\5\ On
February 26, 2021, the Exchange filed Amendment No. 1 to the proposed
rule change, which replaced and superseded the proposed rule change as
originally filed.\6\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 90574 (December 4,
2020), 85 FR 80472 (SR-NASDAQ-2020-081). Comments received on the
Board Diversity Proposal are available on the Commission's website
at: https://www.sec.gov/comments/sr-nasdaq-2020-081/srnasdaq2020081.htm.
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 90951, 86 FR 7135
(January 26, 2021). The Commission designated March 11, 2021 as the
date by which the Commission shall approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
    \6\ In Amendment No. 1, the Exchange amended the Board Diversity
Proposal to: (1) Add a defined term for ``Two or More Races or
Ethnicities'' to proposed Rule 5605(f)(1); (2) modify the
application of proposed Rule 5605(f) to Foreign Issuers and clarify
the scope of Exempt Companies; (3) provide a lower diversity
objective for a company with five or fewer members on its board; (4)
modify the disclosures required by proposed Rule 5606; (5) modify
the process by which a company may provide public disclosure if it
does not meet the applicable board diversity objectives of proposed
Rule 5605(f)(2) and similarly conform the process for providing the
public disclosures under proposed Rule 5606; (6) modify the phase-in
periods for companies subject to proposed Rules 5605(f) and 5606;
(7) provide a grace period for a company that no longer meets the
board diversity objectives of proposed Rule 5605(f)(2) due to a
vacancy on its board and clarify the cure period for a company that
does not satisfy proposed Rule 5605(f); (8) modify the effective
dates and transition periods applicable to proposed Rules 5605(f)
and 5606; (9) make conforming and clarifying changes throughout the
description of the proposed rule change and the proposed rule text;
and (10) provide additional justification and support for the
proposed rule change. The full text of Amendment No. 1 to the Board
Diversity Proposal is available on the Commission's website at:
https://www.sec.gov/comments/sr-nasdaq-2020-081/srnasdaq2020081-8425992-229601.pdf.

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    On December 1, 2020, the Exchange also filed with the Commission,
pursuant to Section 19(b)(1) of the Act \7\ and Rule 19b-4
thereunder,\8\ a proposed rule change to offer certain listed companies
access to a complimentary board recruiting solution to help advance
diversity on company boards (``Board Recruiting Service Proposal'').
The proposed rule change was published for comment in the Federal
Register on December 10, 2020.\9\ On January 19, 2021, pursuant to
Section 19(b)(2) of the Act,\10\ the Commission designated a longer
period within which to approve the proposed rule change, disapprove the
proposed rule change, or institute proceedings to determine whether to
disapprove the proposed rule change.\11\ On February 26, 2021, the
Exchange filed Amendment No. 1 to the proposed rule change, which
replaced and superseded the proposed rule change as originally
filed.\12\
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    \7\ 15 U.S.C. 78s(b)(1).
    \8\ 17 CFR 240.19b-4.
    \9\ See Securities Exchange Act Release No. 90571 (December 4,
2020), 85 FR 79556 (SR-NASDAQ-2020-082). Comments received on the
Board Recruiting Service Proposal are available on the Commission's
website at: https://www.sec.gov/comments/sr-nasdaq-2020-082/srnasdaq2020082.htm.
    \10\ 15 U.S.C. 78s(b)(2).
    \11\ See Securities Exchange Act Release No. 90952, 86 FR 7148
(January 26, 2021). The Commission designated March 10, 2021 as the
date by which the Commission shall approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
    \12\ In Amendment No. 1, the Exchange amended the Board
Recruiting Service Proposal to: (1) Make conforming changes to the
proposal based on Amendment No. 1 to the Board Diversity Proposal;
(2) specify the application of the proposal to a company with five
or fewer members on its board; (3) provide additional justification
for the proposal to allow eligible companies until December 1, 2022
to begin using the complimentary board recruiting solution; and (4)
make additional clarifying changes throughout the description of the
proposed rule change. The full text of Amendment No. 1 to the Board
Recruiting Service Proposal is available on the Commission's website
at: https://www.sec.gov/comments/sr-nasdaq-2020-082/srnasdaq2020082-8425987-229599.pdf.
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    The Commission is publishing this notice and order to solicit
comments on the proposed rule changes, as modified by Amendments No. 1,
from interested persons and to institute proceedings pursuant to
Section 19(b)(2)(B) of the Act \13\ to determine whether to approve or
disapprove the proposed rule changes, as modified by Amendments No.1.
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    \13\ 15 U.S.C. 78s(b)(2)(B).
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II. Description of the Proposed Rule Changes, as Modified by Amendments
No. 1

A. The Board Diversity Proposal

1. Proposed Rule 5605(f)
    The Exchange proposes to adopt new Rule 5605(f)(2), which would
require each Nasdaq-listed company (other than a Foreign Issuer,
Smaller Reporting Company, or Company with a Smaller Board, as
discussed below) to have, or explain why it does not have, at least two
members of its board of directors who are Diverse,\14\ including at
least one Diverse director who self-identifies as Female and at least
one Diverse director who self-identifies as an Underrepresented
Minority or LGBTQ+.\15\ Pursuant to proposed Rule 5605(f)(1),
``Diverse'' would be defined to mean an individual who self-identifies
in one or more of the following categories: (i) Female, (ii)
Underrepresented Minority, or (iii) LGBTQ+. Also pursuant to proposed
Rule 5605(f)(1), ``Female'' would be defined to mean an individual who
self-identifies her gender as a woman, without regard to the
individual's designated sex at birth; ``Underrepresented Minority''
would be defined to mean an individual who self-identifies as one or
more of the following: Black or African American, Hispanic or Latinx,
Asian, Native American or Alaska Native, Native Hawaiian or Pacific
Islander, or Two or More Races or Ethnicities; \16\ and ``LGBTQ+''
would be defined to mean an individual who self-identifies as any of
the following: Lesbian, gay, bisexual, transgender, or as a member of
the queer community.\17\
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    \14\ The Exchange states that it has published an FAQ on its
Listing Center clarifying that ``two members of its board of
directors who are Diverse'' would exclude emeritus directors,
retired directors, and members of an advisory board. See Amendment
No. 1 to the Board Diversity Proposal at 73 n.187.
    \15\ See proposed Rule 5605(f)(2)(A). The Exchange also states
that it does not intend for the Board Diversity Proposal to preclude
companies from considering additional diverse attributes, such as
nationality, disability, or veteran status, in selecting board
members; however, the company would still have to provide the
required disclosure under proposed Rule 5605(f)(3) if the company
does not meet the diversity objectives of proposed Rule 5605(f)(2).
See Amendment No. 1 to the Board Diversity Proposal at 64. The
Exchange also states that, although non-binary is included as a
category in the Board Diversity Matrix under proposed Rule 5606 (as
discussed in Section II.A.2 below), a company would not satisfy the
diversity objectives in proposed Rule 5605(f)(2) to have a minimum
number of Diverse directors if a director self-identifies solely as
non-binary. See id. at 66 n.173.
    \16\ ``Black or African American'' would be defined to mean a
person having origins in any of the Black racial groups of Africa
(not of Hispanic or Latinx origin). See Amendment No. 1 to the Board
Diversity Proposal at 327. ``Hispanic or Latinx'' would be defined
to mean a person of Cuban, Mexican, Puerto Rican, South or Central
American, or other Spanish culture or origin, regardless of race.
See id. ``Asian'' would be defined to mean a person having origins
in any of the original peoples of the Far East, Southeast Asia, or
the Indian subcontinent, including, for example, Cambodia, China,
India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands,
Thailand, and Vietnam. See id. ``Native American or Alaska Native''
would be defined to mean a person having origins in any of the
original peoples of North and South America (including Central
America) and who maintains cultural identification through tribal
affiliation or community recognition. See id. ``Native Hawaiian or
Pacific Islander'' would be defined to mean a person having origins
in any of the peoples of Hawaii, Guam, Samoa, or other Pacific
Islands. See id. ``Two or More Races or Ethnicities'' would be
defined to mean a person who identifies with more than one of the
following categories: White (not of Hispanic or Latinx origin),
Black or African American, Hispanic or Latinx, Asian, Native
American or Alaska Native, Native Hawaiian or Pacific Islander. See
id.; proposed Rule 5605(f)(1). ``White (not of Hispanic or Latinx
origin)'' would be defined to mean a person having origins in any of
the original peoples of Europe, the Middle East, or North Africa.
See Amendment No. 1 to the Board Diversity Proposal at 327.
    \17\ See proposed Rule 5605(f)(1). The Exchange states that the
categories it has proposed to comprise an Underrepresented Minority
are consistent with the categories reported to the Equal Employment
Opportunity Commission (``EEOC'') through the Employer Information
Report EEO-1 Form (``EEO-1'') and should be construed in accordance
with the EEOC's definitions. See Amendment No. 1 to the Board
Diversity Proposal at 9-10, 61. The Exchange also states that, while
the EEO-1 report refers to ``Hispanic or Latino'' rather than
``Latinx,'' the Exchange proposes to use the term ``Latinx'' to
apply broadly to all gendered and gender-neutral forms that may be
used by individuals of Latin American heritage, including
individuals who self-identify as Latino/a/e. See id. at 61 n.160.
The Exchange further states that the terms in the proposed
definition of LGBTQ+ are similar to the identities defined in
California's A.B. 979, but have been expanded to include the queer
community. See id. at 61.
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    The Exchange proposes to define a Foreign Issuer under proposed
Rule 5605(f)(1) as: (a) A Foreign Private Issuer (as defined in Rule
5005(a)(19)); \18\ or (b) a company that (i) is considered a ``foreign
issuer'' under Rule 3b-4(b) under the Act \19\ and (ii)

has its principal executive offices located outside of the United
States.\20\ For Foreign Issuers, the Exchange proposes to define
``Diverse'' to mean an individual who self-identifies as one or more of
the following: Female, LGBTQ+, or an underrepresented individual based
on national, racial, ethnic, indigenous, cultural, religious, or
linguistic identity in the country of the company's principal executive
offices as reported on the company's Form F-1, 10-K, 20-F, or 40-F
(``Underrepresented Individual'').\21\ For a Foreign Issuer that has a
two-tiered board system, the Exchange proposes to define ``board of
directors'' to mean the company's supervisory or non-management
board.\22\ Proposed Rule 5605(f)(2)(B) would require each Foreign
Issuer (other than a Company with a Smaller Board, as discussed below)
to have, or explain why it does not have, at least two members of its
board of directors who are Diverse, including at least one Diverse
director who self-identifies as Female. As proposed, the second Diverse
director may include an individual who self-identifies as one or more
of the following: Female, LGBTQ+, or an Underrepresented
Individual.\23\
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    \18\ Under Rule 5005(a)(19), the term Foreign Private Issuer has
``the same meaning as under Rule 3b-4 under the Act.''
    \19\ See 17 CFR 240.3b-4(b) (``The term foreign issuer means any
issuer which is a foreign government, a national of any foreign
country or a corporation or other organization incorporated or
organized under the laws of any foreign country.'').
    \20\ According to the Exchange, this definition is designed to
recognize that companies that are not Foreign Private Issuers but
are headquartered outside of the United States are foreign companies
notwithstanding the fact that they file domestic Commission reports,
and is designed to exclude companies that are domiciled in a foreign
jurisdiction without having a physical presence in that country. See
Amendment No. 1 to the Board Diversity Proposal at 83.
    \21\ See proposed Rule 5605(f)(2)(B)(i). The Exchange states
that its proposed definition of an Underrepresented Individual is
based on the United Nations Declaration on the Rights of Persons
Belonging to National or Ethnic, Religious and Linguistic Minorities
and the United Nations Declaration on the Rights of Indigenous
Peoples. See Amendment No. 1 to the Board Diversity Proposal at 69
(citing G.A. Res. 47/135, art. 1.1 (December 18, 1992); G.A. Res.
61/295 (September 13, 2007)). The Exchange also states that, because
the EEOC categories of race and ethnicity may not extend to all
countries globally since each country has its own unique demographic
composition, and because on average women tend to be
underrepresented in boardrooms across the globe, proposed Rule
5605(f)(2)(B)(ii) would allow Foreign Issuers to satisfy the
diversity objectives by having two Female directors. See id. at 81-
82.
    \22\ See proposed Rule 5605(f)(2)(B)(i). The Exchange states
that this is consistent with Rule 10A-3(e)(2) under the Act. See
Amendment No. 1 to the Board Diversity Proposal at 84 (citing 17 CFR
240.10A-3(e)(2)).
    \23\ The Exchange also proposes to amend Rule 5615 and IM-5615-
3, which currently permit a Foreign Private Issuer to follow home
country practices in lieu of the requirements set forth in the Rule
5600 series, subject to several exclusions. Specifically, the
Exchange proposes to amend Rule 5615 and IM-5615-3 to add proposed
Rule 5605(f) to the list of excluded corporate governance rules. The
Exchange also proposes to amend Rule 5615 and IM-5615-3 to add
proposed Rule 5606 (as discussed in Section II.A.2 below) to the
list of excluded corporate governance rules. However, the Exchange
states that Foreign Private Issuers that elect to follow an
alternative diversity objective in accordance with home country
practices, or are located in jurisdictions that restrict the
collection of personal data, may satisfy the requirements of
proposed Rule 5605(f) by explaining their reasons for doing so
instead of meeting the diversity objectives of the rule. See
Amendment No. 1 to the Board Diversity Proposal at 84.
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    The Exchange proposes to define a Smaller Reporting Company as set
forth in Rule 12b-2 under the Act.\24\ Proposed Rule 5605(f)(2)(C)
would require each Smaller Reporting Company (other than a Company with
a Smaller Board, as discussed below) to have, or explain why it does
not have, at least two members of its board of directors who are
Diverse, including at least one Diverse director who self-identifies as
Female. As proposed, the second Diverse director may include an
individual who self-identifies as one or more of the following: Female,
LGBTQ+, or an Underrepresented Minority.\25\
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    \24\ See proposed Rule 5605(f)(1). See also 17 CFR 240.12b-2
(defining a Smaller Reporting Company as ``an issuer that is not an
investment company, an asset-backed issuer . . ., or a majority-
owned subsidiary of a parent that is not a smaller reporting company
and that: (1) Had a public float of less than $250 million; or (2)
Had annual revenues of less than $100 million and either: (i) No
public float; or (ii) A public float of less than $700 million'').
    \25\ The Exchange states that, because smaller companies may not
have the resources necessary to compensate an additional director or
engage a search firm to search outside of directors' networks, it
proposes to provide each Smaller Reporting Company with additional
flexibility (i.e., proposed Rule 5605(f)(2)(C) would allow these
companies to satisfy the objective to have two Diverse directors by
having two Female directors). See Amendment No. 1 to the Board
Diversity Proposal at 84-85.
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    Proposed Rule 5605(f)(2)(D) would require each company with a board
of directors of five or fewer members (``Company with a Smaller
Board'') to have, or explain why it does not have, at least one member
of its board of directors who is Diverse.\26\ As proposed, if a company
had five members on its board of directors before becoming subject to
proposed Rule 5605(f), it would not become subject to the objectives of
proposed Rule 5605(f)(2)(A), (B), or (C) to have at least two Diverse
directors if it then added one director to its board in order to
satisfy proposed Rule 5605(f)(2)(D), thereby becoming a six-member
board.\27\ However, a Company with a Smaller Board would become subject
to proposed Rule 5605(f)(2)(A), (B), or (C) if it subsequently expands
its board.\28\
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    \26\ The Exchange proposes this alternative diversity objective
for Companies with a Smaller Board because, according to the
Exchange, these companies may face similar resource constraints to
those of Smaller Reporting Companies, but not all Companies with a
Smaller Board are Smaller Reporting Companies, and therefore the
alternative diversity objective that would be provided to Smaller
Reporting Companies may not be available to them. See id. at 86. The
Exchange further states that Companies with a Smaller Board may be
disproportionately impacted by the proposed rule change if they plan
to satisfy proposed Rule 5605(f)(2) by adding additional directors,
which may impose additional costs in the form of director
compensation and D&O insurance. See id.
    \27\ See proposed Rule 5605(f)(2)(D). The Exchange proposes this
exception to avoid complexity for Companies with a Smaller Board
that attempt to satisfy the diversity objectives by adding a Diverse
director to their board, and to prevent such companies from thereby
being subject to a higher threshold (i.e., that of proposed Rule
5605(f)(2)(A), (B), or (C)) as a result. See Amendment No. 1 to the
Board Diversity Proposal at 86-87.
    \28\ See proposed Rule 5605(f)(2)(D).
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    If a company elects to satisfy the requirements of proposed Rule
5605(f)(2) by disclosing why it does not meet the applicable diversity
objectives of proposed Rule 5605(f)(2), proposed Rule 5605(f)(3) would
require the company to: (i) Specify the requirements of proposed Rule
5605(f)(2) that are applicable (e.g., the applicable subparagraph and
the applicable diversity objectives); and (ii) explain the reasons why
it does not have two Diverse directors (or one Diverse director for a
Company with a Smaller Board).\29\ The disclosure must be provided in
advance of the company's next annual meeting of shareholders: (a) In
any proxy statement or any information statement (or, if a company does
not file a proxy, in its Form 10-K or 20-F); or (b) on the company's
website.\30\ If the company provides the disclosure on its website, the
company must submit such disclosure concurrently with the filing made
pursuant to (a) above and submit a URL link to the disclosure through
the Nasdaq Listing Center, within one business day after such
posting.\31\
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    \29\ As proposed, a company would not need to provide any public
disclosures pursuant to proposed Rule 5605(f) if the company
demonstrates under proposed Rule 5606 (as discussed in Section
II.A.2 below) that it meets the applicable diversity objectives of
proposed Rule 5605(f)(2); however, if a company does not meet its
applicable diversity objectives, it would be required to provide the
additional public disclosure explaining why it does not meet the
applicable objectives. See Amendment No. 1 to the Board Diversity
Proposal at 73.
    \30\ See proposed Rule 5605(f)(3).
    \31\ See id. The Exchange states that it would not evaluate the
substance or merits of a company's explanation provided pursuant to
proposed Rule 5605(f)(3), but would verify that the company has
provided one at the time it files its proxy statement or information
statement (or, if the company does not file a proxy, at the time it
files its Form 10-K or 20-F). See Amendment No. 1 to the Board
Diversity Proposal at 74. If the company does not meet the
applicable diversity objectives and has not provided any
explanation, or has provided an explanation that does not satisfy
proposed Rule 5605(f)(3)(i) and (ii), the company will be considered
deficient with the requirements of proposed Rule 5605(f)(3). See id.
at 74-75.
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    Proposed Rule 5605(f)(5) would specify the phase-in period for any

company newly listing on the Exchange that was not previously subject
to a substantially similar requirement of another national securities
exchange (including through an initial public offering, direct listing,
transfer from another exchange or the over-the-counter market, in
connection with a spin-off or carve-out from a company listed on the
Exchange or another exchange, or through a merger with an acquisition
company listed under IM-5101-2 (``acquisition company'')) and any
company that ceases to be a Foreign Issuer, a Smaller Reporting
Company, or an Exempt Company.\32\
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    \32\ See infra note 46 and accompanying text (describing Exempt
Companies).
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    As proposed, any newly-listed company on the Nasdaq Global Select
Market (``NGS'') or Nasdaq Global Market (``NGM'') would be permitted
to satisfy the requirement of proposed Rule 5605(f)(2) to have, or
explain why it does not have: (i) At least one Diverse director by the
later of (a) one year from the date of listing or (b) the date the
company files its proxy statement or information statement (or, if the
company does not file a proxy, its Form 10-K or 20-F) for the company's
first annual meeting of shareholders subsequent to the company's
listing; and (ii) at least two Diverse directors by the later of (a)
two years from the date of listing or (b) the date the company files
its proxy statement or information statement (or, if the company does
not file a proxy, its Form 10-K or 20-F) for the company's second
annual meeting of shareholders subsequent to the company's listing.\33\
In addition, any newly-listed company on the Nasdaq Capital Market
(``NCM'') would be permitted to satisfy the requirement of proposed
Rule 5605(f)(2) to have, or explain why it does not have, at least two
Diverse directors by the later of: (i) Two years from the date of
listing; or (ii) the date the company files its proxy statement or
information statement (or, if the company does not file a proxy, its
Form 10-K or 20-F) for the company's second annual meeting of
shareholders subsequent to the company's listing.\34\ As proposed, any
newly listed Company with a Smaller Board would be permitted to satisfy
the requirement of proposed Rule 5605(f)(2) to have, or explain why it
does not have, at least one Diverse director by the later of: (i) Two
years from the date of listing, or (ii) the date the company files its
proxy statement or information statement (or, if the company does not
file a proxy, its Form 10-K or 20-F) for the company's second annual
meeting of shareholders subsequent to the company's listing.\35\
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    \33\ See proposed Rule 5605(f)(5)(A).
    \34\ See proposed Rule 5605(f)(5)(B).
    \35\ See proposed Rule 5605(f)(5)(D).
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    Proposed Rule 5605(f)(5)(C) would provide that any company that
ceases to be a Foreign Issuer, Smaller Reporting Company, or Exempt
Company would be permitted to satisfy the requirements of proposed Rule
5605(f) by the later of: (i) One year from the date that the company no
longer qualifies as a Foreign Issuer, Smaller Reporting Company, or
Exempt Company; or (ii) the date the company files its proxy statement
or information statement (or, if the company does not file a proxy, its
Form 10-K or 20-F) for the company's first annual meeting of
shareholders subsequent to such event.
    Proposed Rule 5605(f)(6)(A) would provide that if a company (i)
does not meet the applicable diversity objectives under proposed Rule
5605(f)(2) and fails to provide the disclosure required by proposed
Rule 5605(f)(3), or (ii) fails to hold an annual meeting of
shareholders during the applicable periods in proposed Rule 5605(f)(5)
or (7) and therefore fails to meet, or explain why it does not meet,
the diversity objectives of proposed Rule 5605(f)(2), the Exchange's
Listing Qualifications Department would promptly notify the company and
inform it that it has until the later of its next annual shareholders
meeting or 180 days from the event that caused the deficiency to cure
the deficiency.\36\ If a company does not regain compliance within the
applicable cure period, the Listings Qualifications Department would
issue a Staff Delisting Determination Letter.\37\
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    \36\ The Exchange proposes to add a similar provision as Rule
5810(c)(3)(F). The Exchange also proposes to renumber existing Rules
5810(c)(3)(F) and (G) as Rules 5810(c)(3)(G) and (H), respectively,
and to make a non-substantive change in Rule 5810(c)(2)(A)(iv) to
clarify that Rule 5250(b)(3) is related to ``Disclosure of Third
Party Director and Nominee Compensation.''
    \37\ See Rule 5810(c)(3). A company that receives a Staff
Delisting Determination can appeal the determination to the Hearings
Panel through the process set forth in Rule 5815. See Amendment No.
1 to the Board Diversity Proposal at 88.
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    Moreover, proposed Rule 5605(f)(6)(B) would provide that a company
that has satisfied the diversity objectives of proposed Rule 5605(f)(2)
within the timeframes set forth in proposed Rule 5605(f)(7), but later
ceases to meet the diversity objectives of proposed Rule 5605(f)(2) due
to a vacancy on its board of directors, would have until the later of
(i) one year from the date of vacancy or (ii) the date the company
files its proxy statement or its information statement (or, if the
company does not file a proxy, its Form 10-K or 20-F) in the calendar
year following the year of the date of vacancy, to satisfy proposed
Rule 5605(f)(2) or (3). As proposed, in lieu of providing the
disclosure required by proposed Rule 5605(f)(3), a company relying on
this rule may publicly disclose that it is relying on the grace period
provided by proposed Rule 5605(f)(6)(B).\38\ This disclosure must be
provided in advance of the company's next annual meeting of
shareholders: (a) In any proxy statement or any information statement
(or, if the company does not file a proxy, in its Form 10-K or 20-F);
or (b) on the company's website.\39\ If the company provides such
disclosure on its website, then the company must submit such disclosure
concurrently with the filing made pursuant to (a) and submit a URL link
to the disclosure through the Nasdaq Listing Center, within one
business day after such posting.\40\
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    \38\ See proposed Rule 5605(f)(6)(B).
    \39\ See id.
    \40\ See id.
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    Proposed Rule 5605(f)(7) would specify the transition period for
the implementation of the requirements of proposed Rule 5605(f). As
proposed, each company listed on the Exchange (including a Company with
a Smaller Board) would be required to have, or explain why it does not
have, at least one Diverse director by the later of: (i) Two calendar
years after the approval date of the proposal (``First Effective
Date''); or (ii) the date the company files its proxy statement or
information statement (or, if the company does not file a proxy, its
Form 10-K or 20-F) for the company's annual shareholders meeting during
the calendar year of the First Effective Date.\41\ In addition, each
company listed on NGS or NGM must have, or explain why it does not
have, at least two Diverse directors by the later of: (i) Four calendar
years after the approval date of the proposal (``Second NGS/NGM
Effective Date''); or (ii) the date the company files its proxy
statement or information statement (or, if the company does not file a
proxy, its Form 10-K or 20-F) for the company's annual shareholders
meeting during the calendar year of the Second NGS/NGM Effective
Date.\42\ Moreover, each company listed on NCM must have, or explain
why it does not have, at least two Diverse directors by the later of:
(i) Five calendar years after the approval date of the proposal
(``Second NCM Effective Date''); or (ii) the date the company files its
proxy statement or information statement (or, if the company does not
file a proxy, its Form 10-K or 20-F) for the company's annual

shareholders meeting during the calendar year of the Second NCM
Effective Date.\43\ As proposed, a company would not be required to
comply with the requirements of proposed Rule 5605(f) prior to the end
of the phase-in periods under proposed Rule 5605(f)(5), if
applicable.\44\ Furthermore, a company listed on NCM that transfers to
NGS or NGM after the approval date but prior to the end of the
transition periods set forth in proposed Rule 5605(f)(7) would be
required to satisfy the requirements of proposed Rule 5605(f) by the
later of: (i) The periods set forth in proposed Rule 5605(f)(7)(C); or
(ii) one year from the date of transfer.\45\
---------------------------------------------------------------------------

    \41\ See proposed Rule 5605(f)(7)(A).
    \42\ See proposed Rule 5605(f)(7)(B).
    \43\ See proposed Rule 5605(f)(7)(C).
    \44\ See proposed Rule 5605(f)(7)(D). A company listing after
the approval date, but prior to the end of the periods set forth in
proposed Rule 5605(f)(7) would be required to fully satisfy the
requirements of proposed Rule 5605(f) by the later of the periods
under proposed Rule 5605(f)(7) or the two year phase-in periods
under proposed Rule 5605(f)(5). See proposed Rule 5605(f)(7)(E).
According to the Exchange, the proposed transition and phase-in
periods are intended to provide newly-listed public companies with
additional time to meet the diversity objectives of proposed Rule
5605(f)(2), as newly-listed public companies may have unique
governance structures, such as staggered boards or director seats
held by venture capital firms, that require additional timing
considerations when adjusting the board's composition. See Amendment
No. 1 to the Board Diversity Proposal at 79. The Exchange further
states that the proposed transition and phase-in periods are
intended to provide additional flexibility to companies listed on
NCM, as such companies are typically smaller and may face additional
challenges and resource constraints when identifying additional
director nominees who self-identify as Diverse. See id. The Exchange
also states that its proposed phase-in periods are consistent with
the phase-in periods it provides to companies for other board
composition requirements. See id. at 81. See also, e.g., Rules
5615(b)(1), 5615(b)(3), and 5620.
    \45\ See proposed Rule 5605(f)(7)(F).
---------------------------------------------------------------------------

    Proposed Rule 5605(f)(4) would exempt the following types of
companies from the requirements of proposed Rule 5605(f) (``Exempt
Companies''): (1) Acquisition companies; (2) asset-backed issuers and
other passive issuers (as set forth in Rule 5615(a)(1)); (3)
cooperatives (as set forth in Rule 5615(a)(2)); (4) limited
partnerships (as set forth in Rule 5615(a)(4)); (5) management
investment companies (as set forth in Rule 5615(a)(5)); (6) issuers of
non-voting preferred securities, debt securities, and derivative
securities (as set forth in Rule 5615(a)(6)) that do not have equity
securities listed on the Exchange; and (7) issuers of securities listed
under the Rule 5700 series.\46\
---------------------------------------------------------------------------

    \46\ The Exchange states that these companies do not have
boards, do not list equity securities, or are not operating
companies. See Amendment No. 1 to the Board Diversity Proposal at
90. The Exchange also states that these companies are already exempt
from certain corporate governance standards related to board
composition, as described in Rule 5615. See id. The Exchange also
states that, although it is exempting acquisition companies from the
requirements of proposed Rule 5605(f), upon such a company's
completion of a business combination with an operating company, the
post-business combination entity would be provided the same phase-in
period as other newly listed companies to satisfy the requirements
of proposed Rule 5605(f). See id. at 90-91, 151. The Exchange states
that this approach is similar to other phase-in periods currently
granted to acquisition companies. See id. at 90-91. See also, e.g.,
Rule 5615(b)(1).
---------------------------------------------------------------------------

    The Exchange states that it has published FAQs on its Listing
Center to provide guidance to companies on the application of the
proposed rules in the Board Diversity Proposal, and represents that it
will establish a dedicated mailbox for companies and their counsel to
email additional questions to the Exchange regarding the application of
such proposed rules.\47\
---------------------------------------------------------------------------

    \47\ See Amendment No. 1 to the Board Diversity Proposal at 20.
---------------------------------------------------------------------------

2. Proposed Rule 5606
    The Exchange proposes to adopt new Rule 5606, which would require
each Nasdaq-listed company (other than Exempt Companies \48\) to
publicly disclose in an aggregated form, to the extent permitted by
applicable law, information on the voluntary self-identified gender and
racial characteristics and LGBTQ+ status of the company's board of
directors.\49\
---------------------------------------------------------------------------

    \48\ See proposed Rule 5606(c).
    \49\ The Exchange states that its proposal would not prevent
companies from disclosing information related to other diverse
attributes of board members beyond those highlighted in the rule if
they felt such disclosure would benefit investors. See Amendment No.
1 to the Board Diversity Proposal at 64.
---------------------------------------------------------------------------

    Specifically, pursuant to proposed Rule 5606(a), each Nasdaq-listed
company would be required to annually disclose its board-level
diversity data a substantially similar format \50\ as the ``Board
Diversity Matrix'' provided in proposed Rule 5606(a).\51\ As proposed,
companies would be required to provide the Board Diversity Matrix
information at least once per year.\52\ If, within the same year, a
company changes its board composition after it publishes the matrix,
the company may, but is not required to, publish its updated
information.\53\ In addition, any publication of the information in the
Board Diversity Matrix must be included in a searchable format and, if
a company uses a graphic or image format (i.e., tif, jpg, gif, or png),
the company must also include the same information as searchable text
or in a searchable table.\54\
---------------------------------------------------------------------------

    \50\ As proposed, a company may not substantially alter the
Board Diversity Matrix. However, a company may supplement its
disclosure by providing additional information related to its
directors (e.g., a company may choose to provide the information on
a director-by-director basis or may choose to include any skills,
experience, and attributes of each of its directors that are
relevant to the company). Supplemental information may be included
below the information required by the Board Diversity Matrix or in a
separate table. See id. at 326-27.
    \51\ Following the first year of disclosure of the Board
Diversity Matrix, all companies would be required to include the
current year and immediately prior year diversity statistics in the
disclosure. See proposed Rule 5606(a). If a company publishes the
Board Diversity Matrix on its website, the disclosure must remain
accessible on the company's website. See Amendment No. 1 to the
Board Diversity Proposal at 326.
    \52\ See Amendment No. 1 to the Board Diversity Proposal at 326.
    \53\ See id. In addition, the Board Diversity Matrix must
include the date the information was collected as the ``as of
date.'' See id.
    \54\ The searchable information could be included, for example,
together with the related graphic or in an appendix. See id.
---------------------------------------------------------------------------

    In the proposed Board Diversity Matrix, a company would be required
to provide the total number of directors on its board and the company
(other than a Foreign Issuer) would include the following information
in accordance with the instructions accompanying the Board Diversity
Matrix: (1) The number of directors based on gender identity (female,
male, or non-binary \55\) and the number of directors who did not
disclose gender; (2) the number of directors based on race and
ethnicity (African American or Black, Alaskan Native or Native
American, Asian, Hispanic or Latinx, Native Hawaiian or Pacific
Islander, White, or Two or More Races or Ethnicities \56\),
disaggregated by gender identity (or did not disclose gender); (3) the
number of directors who self-identify as LGBTQ+; and (4) the number of
directors who did not disclose a demographic background under item (2)
or (3) above.\57\ In the proposed Board Diversity Matrix, any director
who chooses not to disclose a gender would be included in the ``Did Not
Disclose Gender'' category and any director who chooses not to identify
as any race or ethnicity or not to identify as LGBTQ+ would be included
in the

``Did Not Disclose Demographic Background'' category.
---------------------------------------------------------------------------

    \55\ ``Non-binary'' refers to genders that are not solely man or
woman; someone who is non-binary may have more than one gender, have
no gender, or their gender may not be in relation to the gender
binary. See id. at 327.
    \56\ If a director self-identifies in the ``Two or More Races or
Ethnicities'' category, the director must also self-identify in each
individual category, as appropriate. See id. at 66 n.174.
    \57\ The Exchange states that defined terms for the race and
ethnicity categories in the instructions to the Board Diversity
Matrix are substantially similar to the terms and definitions used
in the EEO-1 report, as described above. See supra note 17. Also, in
the instructions to the Board Diversity Matrix, LGTBQ+ is defined
similarly to proposed Rule 5605(f)(1) as a person who identifies as
any of the following: lesbian, gay, bisexual, transgender, or a
member of the queer community.
---------------------------------------------------------------------------

    A company that qualifies as a Foreign Issuer under proposed Rule
5605(f)(1) may elect to use an alternative Board Diversity Matrix
format.\58\ Similar to other companies, a Foreign Issuer would be
required to provide the total number of directors on its board. The
Foreign Issuer would also be required to provide the following in its
Board Diversity Matrix: (1) Its country of principal executive offices;
(2) whether it is a Foreign Private Issuer; (3) whether disclosure is
prohibited under home country law; (4) the number of directors based on
gender identity (female, male, or non-binary) and the number of
directors who did not disclose gender; (5) the number of directors who
self-identify as Underrepresented Individuals in home country
jurisdiction; (6) the number of directors who self-identify as LGBTQ+;
and (7) the number of directors who did not disclose the demographic
background under item (5) or (6) above.\59\ In the proposed Board
Diversity Matrix, any director who chooses not to disclose a gender
would be included in the ``Did Not Disclose Gender'' category and any
director who chooses not to identify as an Underrepresented Individual
or not to identify as LGBTQ+ would be included in the ``Did Not
Disclose Demographic Background'' category.
---------------------------------------------------------------------------

    \58\ See proposed Rule 5606(a).
    \59\ See id.
---------------------------------------------------------------------------

    Proposed Rule 5606(b) would require each company to provide the
disclosure required under proposed Rule 5606 in the same manner as, and
concurrently with, the disclosure required by proposed Rule
5605(f)(3).\60\
---------------------------------------------------------------------------

    \60\ See supra notes 30-31 and accompanying text.
---------------------------------------------------------------------------

    Proposed Rule 5606(d) would permit a company newly listing on the
Exchange that was not previously subject to a substantially similar
requirement of another national securities exchange (including through
an initial public offering, direct listing, transfer from another
exchange or the over-the-counter market, in connection with a spin-off
or carve-out from a company listed on the Exchange or another exchange,
or through a merger with an acquisition company) to satisfy the
requirement of proposed Rule 5606 within one year of listing on the
Exchange.
    Pursuant to Rule 5606(e), proposed Rule 5606 would become operative
one year after a Commission approval of the proposal. A company would
be required to be in compliance with proposed Rule 5606 by the later
of: (i) One calendar year from the approval date (``Effective Date'');
or (ii) the date the company files its proxy statement or its
information statement for its annual meeting of shareholders (or, if
the company does not file a proxy or information statement, the date it
files its Form 10-K or 20-F) during the calendar year of the Effective
Date.
    The Exchange proposes to amend Rule 5810(c)(2)(A)(iv) to include a
deficiency from the standards of proposed Rule 5606 as a deficiency for
which a company may submit a plan of compliance for Exchange staff
review. Accordingly, if a company fails to adhere to proposed Rule
5606, the Exchange would notify the company that it is not in
compliance with a listing standard and allow the company 45 calendar
days to submit a plan to regain compliance and, upon review of such
plan, the Exchange may provide the company with up to 180 days to
regain compliance.\61\ If the company does not submit a plan or regain
compliance within the applicable time periods, it would be issued a
Staff Delisting Determination, which the company could appeal to a
Hearings Panel pursuant to Rule 5815.\62\
---------------------------------------------------------------------------

    \61\ See Rule 5810(c)(2).
    \62\ See id.
---------------------------------------------------------------------------

B. The Board Recruiting Service Proposal

    In order to help advance diversity on company boards and to help
companies prepare for and, if approved, comply with proposed Rules
5605(f) and 5606, the Exchange proposes to provide certain Nasdaq-
listed companies with one-year of complimentary access for two users to
a board recruiting solution, which would provide access to a network of
board-ready Diverse candidates, allowing companies to identify and
evaluate Diverse board candidates.\63\ According to the Exchange, this
service has an approximate retail value of $10,000 per year.\64\
---------------------------------------------------------------------------

    \63\ See proposed IM-5900-9; Amendment No. 1 to the Board
Recruiting Service Proposal at 10-11.
    \64\ See proposed IM-5900-9.
---------------------------------------------------------------------------

    The Exchange proposes to offer this service to any ``Eligible
Company,'' which would be defined to mean a listed company (except as
described below) that represents to the Exchange that it does not have:
(i) At least one director who self-identifies as Female; and (ii) at
least one director who self-identifies as one or more of the following:
Black or African American, Hispanic or Latinx, Asian, Native American
or Alaska Native, Native Hawaiian or Pacific Islander, or Two or More
Races or Ethnicities, or who self-identifies as lesbian, gay, bisexual,
transgender, or as a member of the queer community.\65\ A company that
is (i) a Foreign Private Issuer (as defined in Rule 5005(a)(19)), or
(ii) considered a foreign issuer under Rule 3b-4(b) under the Act and
has its principal executive offices located outside of the United
States, would be an Eligible Company if the company represents to the
Exchange that it does not have: (i) At least one director who self-
identifies as Female; and (ii) at least one director who self-
identifies as one or more of the following: Female, an underrepresented
individual based on national, racial, ethnic, indigenous, cultural,
religious, or linguistic identity in the country of the company's
principal executive offices, or lesbian, gay, bisexual, transgender, or
as a member of the queer community.\66\ A company that is a Smaller
Reporting Company (as defined in Rule 12b-2 under the Act) would be an
Eligible Company if the company represents to the Exchange that it does
not have: (i) At least one director who self-identifies as Female, and
(ii) at least one director who self-identifies as one or more of the
following: Female, Black or African American, Hispanic or Latinx,
Asian, Native American or Alaska Native, Native Hawaiian or Pacific
Islander, or Two or More Races or Ethnicities, or who self-identifies
as lesbian, gay, bisexual, transgender, or as a member of the queer
community.\67\
---------------------------------------------------------------------------

    \65\ See proposed IM-5900-9(a). The Exchange states that,
although proposed Rule 5605(f)(2)(D) would require a Company with a
Smaller Board to have, or explain why it does not have, at least one
Diverse director on its board, such a company would be considered an
Eligible Company if it does not have at least one director who self-
identifies as female and at least one director who self-identifies
as an Underrepresented Minority or LGBTQ+, which the Exchange
believes would help promote greater diversity on boards of all
sizes. See Amendment No. 1 to the Board Recruiting Service Proposal
at 11 n.20.
    \66\ See proposed IM-5900-9(b).
    \67\ See proposed IM-5900-9(c). The Exchange states that a
company that is not an Eligible Company would be able to receive
complimentary 90-day access to the board recruiting solution, which
is being offered by Nasdaq's partner to all clients of Nasdaq, Inc.,
including non-listed companies. See Amendment No. 1 to the Board
Recruiting Service Proposal at 12 n.21.
---------------------------------------------------------------------------

    As proposed, until December 1, 2022, any Eligible Company that
requests access to this service through the Nasdaq Listing Center will
receive complimentary access for one year from the initiation of the
service.\68\ The Exchange states that it intends to evaluate the
service and the progress made in enhancing diversity and may extend the
program prior to its expiration through another proposed rule change
filed with the

Commission.\69\ The Exchange states that no other company would be
required to pay higher fees as a result of its Board Recruiting Service
Proposal and represents that providing the proposed complimentary
service would have no impact on the resources available for its
regulatory programs.\70\
---------------------------------------------------------------------------

    \68\ See proposed IM-5900-9.
    \69\ See Amendment No. 1 to the Board Recruiting Service
Proposal at 12.
    \70\ See id.
---------------------------------------------------------------------------

III. The Exchange's Arguments in the Proposals and the Comment and
Response Letters Received on the Proposals

A. Summary of the Exchange's Arguments in the Proposals

1. The Board Diversity Proposal
    In support of the Board Diversity Proposal, the Exchange states
that it has reviewed dozens of empirical studies and found that an
extensive body of empirical research demonstrates that diverse boards
are positively associated with improved corporate governance and
company performance.\71\ While the Exchange acknowledges that some
studies have mixed results on this issue--for example, some studies
have found that board gender and ethnic diversity has a non-significant
relationship or no relationship with a company's performance \72\--the
Exchange believes that, at a minimum, the academic and empirical
studies support the conclusion that board diversity does not have
adverse effects on company performance.\73\
---------------------------------------------------------------------------

    \71\ See Amendment No. 1 to the Board Diversity Proposal at 13.
The Exchange states that studies have identified positive
relationships between board diversity and commonly used financial
metrics, including higher returns on invested capital, returns on
equity, earnings per share, earnings before interest and taxation
margin, asset valuation multiples, and credit ratings. See id. at
13, Section 3.a.III.A. The Exchange also points to a report that
suggests that the relationship between board gender diversity and
corporate performance may extend to LGBTQ+ diversity. See id. at 25.
    \72\ See id. at 25-27.
    \73\ See id. at 28. The Exchange also states that this is not
the first time it has considered whether, on balance, various
studies finding mixed results related to board composition and
company performance are a sufficient rationale to propose a listing
rule. See id. The Exchange states that, for example, in 2003,
notwithstanding the various findings of studies at the time
regarding the relationship between company performance and board
independence, it adopted listing rules requiring a majority
independent board. See id.
---------------------------------------------------------------------------

    The Exchange also states that there is substantial evidence that
board diversity promotes investor protection, including by enhancing
the quality of a company's financial reporting, internal controls,
public disclosures, and management oversight.\74\ The Exchange states
that more than a dozen studies have found a positive association
between gender diversity and important investor protections,\75\ and
some academics assert that such findings may extend to other forms of
diversity, including racial and ethnic diversity.\76\ The Exchange also
states that it has reviewed studies suggesting that board diversity
could enhance a company's ability to monitor management by reducing
``groupthink'' and improving decision-making.\77\
---------------------------------------------------------------------------

    \74\ See id. at 29.
    \75\ See id. at 29, Section 3.a.III.B. The Exchange states that
studies have found that gender-diverse boards or audit committees
are associated with: More transparent public disclosures and less
information asymmetry; better reporting discipline by management; a
lower likelihood of manipulated earnings through earnings
management; an increased likelihood of voluntarily disclosing
forward-looking information; a lower likelihood of receiving audit
qualifications due to errors, non-compliance, or omission of
information; and a lower likelihood of securities fraud. See id. at
13, Section 3.a.III.B. In addition, the Exchange states that studies
found that having at least one woman on the board is associated with
a lower likelihood of material weaknesses in internal control over
financial reporting and a lower likelihood of material financial
restatements. See id. at 13, Section 3.a.III.B, Section 3.b.II.B.
    \76\ See id. at 29, Section 3.a.III.B.
    \77\ See id. at Section 3.a.III.C.
---------------------------------------------------------------------------

    The Exchange states that, while some companies have made progress
in diversifying their boardrooms,\78\ the national market system and
the public interest would be well-served by a ``disclosure-based,
business driven'' framework for companies to embrace meaningful and
multi-dimensional diversification of their boards.\79\ The Exchange
states that its discussions with organizational leaders representing a
broad spectrum of market participants and stakeholders (including
business, investor, governance, legal, and civil rights communities)
revealed strong support for disclosure requirements that would
standardize the reporting of board diversity statistics.\80\ The
Exchange further states that such discussions reinforced the notion
that if companies recruit by skill set and experience rather than
title, they would find that there is more than enough diverse talent to
satisfy demand.\81\
---------------------------------------------------------------------------

    \78\ The Exchange believes that a supermajority of listed
companies have at least one woman on the board and that listed
companies are diligently working to add directors with other diverse
attributes. See id. at 12, 41. The Exchange states that, while
gender diversity has improved among U.S. company boards in recent
years, the pace of change has been gradual and the U.S. still lags
behind jurisdictions that have focused on board diversity. See id.
at 12, Section 3.a.IV. The Exchange also states that progress toward
bringing underrepresented racial and ethnic groups into the
boardroom has been slower. See id. at 12, Section 3.a.IV.
    \79\ See id. at 8-9.
    \80\ See id. at Section 3.a.V. The Exchange also states that the
majority of the organizations were in agreement that companies would
benefit from a disclosure-based, business-driven framework to drive
meaningful and systemic change in board diversity, and that a
disclosure-based approach would be more palatable to the U.S.
business community than a mandate. See id. at 46. According to the
Exchange, some in the group pointed out that smaller companies and
companies in certain industries may face challenges finding diverse
board members. See id. In addition, the Exchange states that leaders
from the legal community emphasized that any proposed rule change
that imposed additional burdens beyond, or is inconsistent with,
existing securities laws would present an additional burden and
potentially more legal liability for listed companies. See id. at
46-47.
    \81\ See id. at 19-20, 46. According to the Exchange, studies
suggest that the traditional director candidate selection process
may create barriers to considering qualified diverse candidates for
board positions (e.g., directors looking within their own social
networks for candidates with previous C-suite experience). See id.
at 41-44, Section 3.b.II.A.
---------------------------------------------------------------------------

    Moreover, the Exchange states that current reporting of board
diversity data is not provided in a consistent manner or on a
sufficiently widespread basis and, as such, investors are not able to
readily compare board diversity statistics across companies.\82\ In
pointing out the ``broad latitude'' afforded to companies by Commission
rules relating to board diversity and proxy disclosure, the Exchange
states that the absence of a specific definition of ``diversity'' for
such disclosures has resulted in current reporting of board-level
diversity statistics being significantly unreliable and unusable to
investors.\83\ The Exchange states that the lack of transparency
creates barriers to investment analysis, due diligence, and academic
study, and is impacting investors who are increasingly basing public
advocacy, proxy voting, and direct shareholder-company engagement
decisions on board diversity considerations.\84\
---------------------------------------------------------------------------

    \82\ See id. at 9. The Exchange also states that, while
conducting research on the state of board diversity among its listed
companies, it encountered multiple key challenges, such as: (1)
Inconsistent disclosure and definitions of ``diversity'' across
companies; (2) limited data on diverse characteristics outside of
gender; (3) inconsistent or no disclosure of a director's race,
ethnicity, or other diversity attributes (e.g., nationality); (4)
difficult-to-extract data because statistics are often embedded in
graphics; and (5) aggregation of information, making it difficult to
separate gender from other categories of diversity. See id. at 51.
See also id. at 59, 107 (stating that the current lack of
transparency and consistency makes it difficult for the Exchange and
investors to determine the state of diversity among listed companies
and each board's philosophy regarding diversity; to the extent
investors must obtain this information on their own through an
imperfect process, this increases information asymmetries between
larger and smaller stakeholders; and a broader definition of
diversity may result in certain diverse candidates being overlooked
and may hinder meaningful progress on improving diversity related to
race, ethnicity, sexual orientation, and gender identity).
    \83\ See id. at Sections 3.a.VI.A-B.
    \84\ See id. at 51-52.

---------------------------------------------------------------------------

    The Exchange states that it is well positioned to establish
practices that would assist in carrying out its mandate to protect
investors and remove impediments from the market through the Board
Diversity Proposal.\85\ The Exchange believes that it is well within
its delegated authority to propose listing rules designed to enhance
transparency, provided that they do not conflict with existing federal
securities laws.\86\ The Exchange also states that the proposal is
related to corporate governance standards for listed companies and is
therefore not designed to regulate by virtue of any authority conferred
by the Act matters not related to the purposes of the Act or the
administration of the Exchange.\87\ While the Exchange recognizes that
U.S. states are increasingly proposing and adopting board diversity
requirements, the Exchange states that certain of its current corporate
governance listing rules relate to areas that are also regulated by
states (e.g., quorums, shareholder approval of certain
transactions).\88\ The Exchange also states that adopting Exchange
rules relating to such matters (and the proposed rule changes described
herein) would ensure uniformity of such rules among its listed
companies.\89\
---------------------------------------------------------------------------

    \85\ See id. at 53. The Exchange also states that the Board
Diversity Proposal leverages the Exchange's unique ability, as a
self-regulatory organization (``SRO''), to influence corporate
governance in furtherance of the goal of Section 342 of the Dodd-
Frank Wall Street Reform and Consumer Protection Act of 2010. See
id. at 18.
    \86\ See id. at 58. The Exchange states that, for example, it
already requires its listed companies to publicly disclose
compensation or other payments by third parties to a company's
directors or nominees, notwithstanding that such disclosure is not
required by federal securities laws. See id. at 58-59. The Exchange
also states that it has designed the proposal to avoid a conflict
with existing disclosure requirements under Regulation S-K and
mitigate additional burdens for companies by providing them with
flexibility to provide such disclosure on their website, in their
proxy statement or information statement, or, if a company does not
file a proxy, in its Form 10-K or 20-F, and by not requiring
companies to adopt a diversity policy. See id. at 60.
    \87\ See id. at Section 3.b.II.E.
    \88\ See id. at 155-56. The Exchange recognizes that several
states have enacted or proposed legislation relating to board
diversity and that Congress is considering legislation to require
Commission-registered companies to provide board diversity
statistics and disclose whether they have a board diversity policy.
See id. at 16.
    \89\ See id. at 156.
---------------------------------------------------------------------------

    The Exchange believes that the disclosure-based framework of
proposed Rule 5605(f) may influence corporate conduct if a company
chooses to meet the proposed diversity objectives,\90\ and could help
increase opportunities for Diverse candidates who otherwise may be
overlooked due to the impediments of the traditional director
recruitment process.\91\ The Exchange also believes that boards that
choose to meet the proposed diversity objectives may experience
benefits from diversity that perfect the mechanism of a free and open
market and a national market system, and promote investor protection
and the public interest.\92\ Moreover, the Exchange believes that, to
the extent a company chooses not to meet the proposed diversity
objectives, the disclosure under proposed Rule 5605(f)(3) would provide
analysts and investors with a better understanding about a company's
reasons for not doing so and its philosophy regarding diversity.\93\
The Exchange believes that this disclosure would enable the investment
community to conduct more informed analyses of, and have more informed
conversations with, companies, and improve the quality of information
available to investors who rely on this information to make informed
investment and voting decisions.\94\ In addition, the Exchange believes
that the proposed disclosure framework and phase-in and transition
periods under Rule 5605(f) recognize the differences (e.g., in
demographics or resources) among different types of companies and would
not unfairly discriminate among companies.\95\
---------------------------------------------------------------------------

    \90\ See id. at 121.
    \91\ See id. For these reasons, the Exchange believes that
proposed Rule 5605(f) is designed to remove impediments to a free
and open market and a national market system. See id. The Exchange
also states that proposed Rule 5605(f) is not designed to create
additional impediments to a free and open market and a national
market system because it would empower companies to maintain
decision-making authority over the composition of their boards. See
id. at 122.
    \92\ See id. at Sections 3.b.II.B-C. The Exchange also believes
that including diverse directors with a broader range of skills,
perspectives, and experiences may help detect and prevent fraudulent
and manipulative acts and practices by mitigating ``groupthink'' and
enhancing the functioning of boards, and may reduce the likelihood
of insider trading and other fraudulent and manipulative acts and
practices. See id. at 123-29. In addition, the Exchange states that
it recognizes that directors may bring diverse perspectives, skills,
and experiences to the board, notwithstanding that they have similar
attributes; therefore, the Exchange believes that it is in the
public interest to permit a company to choose whether to meet the
proposed diversity objectives or explain why it does not. See id. at
129-30.
    \93\ See id. at 122. The Exchange also believes that the
proposal could help lower information asymmetry and reduce the risk
of insider trading or opportunistic insider behavior, which would
help to make stock prices more informative and enhance stock
liquidity, and is therefore designed to protect investors and
promote capital formation and efficiency. See id. at 135.
    \94\ The Exchange believes that, therefore, the proposal is
designed to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and to promote
capital formation and efficiency. See id. at 122-23.
    \95\ See id. at Section 3.b.II.D. See also id. at 161-63
(stating that the proposal would not impose any burden on
competition among issuers that is not necessary or appropriate in
furtherance of the purposes of the Act and would not impose any
burden on competition among listing exchanges).
---------------------------------------------------------------------------

    The Exchange believes that the disclosures required by proposed
Rule 5606 and the accompanying format requirements would protect
investors by eliminating data collection inaccuracies, decreasing
investors' costs, and enhancing investors' ability to utilize the
information disclosed.\96\ The Exchange also believes that proposed
Rule 5606 would protect investors that view information related to
board diversity as material to their investment and voting decisions,
and enhance investor confidence by assisting investors in making more
informed decisions.\97\ Moreover, the Exchange believes that the
proposed annual disclosures would provide consistent information to the
public and would enable investors to continually review the board
composition of a company to track trends,\98\ as well as simplify or
eliminate the need for a company to respond to multiple investor
requests for board diversity information.\99\ The Exchange also
believes that the proposed timing for the board composition disclosures
would align with other governance-related disclosures (e.g., those
provided in the proxy) and would make it easier for investors to know
where a company has provided the disclosures and give shareholders
access to the information

prior to a company's annual shareholders meeting.\100\ Finally, the
Exchange believes that proposed Rule 5606 would provide appropriate
flexibility for Foreign Issuers \101\ and appropriate exceptions for
certain types of Nasdaq-listed companies,\102\ and would provide
reasonable compliance periods because it would impose only a de minimis
burden on companies.\103\
---------------------------------------------------------------------------

    \96\ See id. at 110. The Exchange also believes that it would be
in the public interest to utilize the Board Diversity Matrix format
because it would remove impediments in aggregating and analyzing
data across all companies. See id. at 113. The Exchange additionally
believes that it would be reasonable and in the public interest to
allow companies the flexibility of supplementing their disclosure by
providing additional information related to their directors (beyond
what is required by proposed Rule 5606) in the Board Diversity
Matrix. See id. The Exchange also states that its proposed
definition of ``Diverse'' would be familiar to most companies and
that the proposed Board Diversity Matrix would provide for
standardized disclosures. See id. at 114. Moreover, the Exchange
believes that prohibiting companies from providing the information
through graphics and images would allow investors to easily
disaggregate the data and track directors with multiple diversity
characteristics. See id. at 113.
    \97\ See id. at 110-11. In addition, the Exchange states that
the proposed disclosure format would provide a company with a
uniform template with the flexibility to include any additional
details about its board that the company believes would be useful to
investors. See id. at 111.
    \98\ The Exchange also states that the disclosures under
proposed Rule 5606 would provide a means for the Exchange to assess
whether companies meet the diversity objectives under proposed Rule
5605(f), which would protect investors and the public interest. See
id. at 116.
    \99\ See id. at 112. The Exchange also believes that the
proposed disclosures would make information available to investors
who otherwise would not be able to obtain individualized
disclosures. See id.
    \100\ See id. at 115. See also id. at 135 (stating a similar
belief with respect to the disclosures under proposed Rule 5605(f)).
The Exchange also states that proposed Rule 5606(b) would closely
align the timing for companies that choose to disclose the Board
Diversity Matrix data on their websites and companies that choose to
provide the data through a Commission filing. See id. at 115.
    \101\ See id. at 115-16.
    \102\ See id. at 117-18.
    \103\ See id. at 118. See also id. at 159-60 (stating that the
Exchange faces competition in the market for listing services, and
the Exchange's belief that there would be a de minimis time and
economic burden on listed companies to collect and disclose the
diversity statistical data under proposed Rule 5606, and that any
burden placed on companies to gather and disclose this information
would be counterbalanced by the benefits that the information would
provide to a company's investors). In the Board Diversity Proposal,
the Exchange also describes the alternatives that it considered,
including: (1) Mandate-based and disclosure-based approaches; (ii)
higher and lower diversity objectives; (iii) longer and shorter
compliance timeframes; and (iv) broader and narrower definitions of
``Diverse.'' See id. at Section 3.a.VII.D.
---------------------------------------------------------------------------

2. The Board Recruiting Service Proposal
    In support of the Board Recruiting Service Proposal, the Exchange
argues that offering a board recruiting solution would assist and
encourage listed companies to increase diverse representation on their
boards, which the Exchange believes could result in improved corporate
governance, strengthening of market integrity, and improved investor
confidence.\104\ The Exchange further states that offering this service
would help companies to achieve compliance with the Board Diversity
Proposal, if it were approved.\105\ The Exchange also states that
utilization of the complimentary board recruiting solution would be
optional, and no company would be required to use the service.\106\
---------------------------------------------------------------------------

    \104\ See Amendment No. 1 to the Board Recruiting Service
Proposal at 10. The Exchange reiterates that, in researching the
Board Diversity Proposal, it has reviewed dozens of empirical
studies and found that an extensive body of academic and empirical
research demonstrates diverse boards are positively associated with
improved corporate governance and company performance. See id. at 6.
Moreover, the Exchange states that investors and investor groups are
calling for diversification in the boardroom, and legislators at the
federal and state level are increasingly taking action to encourage
or mandate corporations to diversify their boards and improve
diversity disclosures. See id. at 9-10.
    \105\ See id. at 10.
    \106\ See id. at 13.
---------------------------------------------------------------------------

    The Exchange further argues that it is reasonable and not unfairly
discriminatory to offer the board recruiting solution only to Eligible
Companies because the Exchange believes these companies have the
greatest need to identify Diverse board candidates, particularly if
these companies elect to meet the diversity objectives in the Board
Diversity Proposal, if approved, rather than disclosing why they have
not met the objectives.\107\ Additionally, the Exchange believes that
companies that already have two Diverse directors have demonstrated by
their current board composition that they do not need additional
assistance provided by the Exchange to identify Diverse candidates for
their boards.\108\ The Exchange also believes that offering this
complimentary service would help it compete to attract and retain
listings, particularly in light of the additional requirements in the
Board Diversity Proposal that would apply to Exchange-listed companies,
if it were approved.\109\ The Exchange further represents that
individual listed companies would not be given specially negotiated
packages of products or services to list, or remain listed.\110\
---------------------------------------------------------------------------

    \107\ See id.
    \108\ See id. at 13-14. As described above, although proposed
Rule 5605(f)(2)(D) would require a Company with a Smaller Board to
have, or explain why it does not have, at least one Diverse director
on its board, such a company would be considered an Eligible Company
if it does not have at least one director who self-identifies as
female and at least one director who self-identifies as an
Underrepresented Minority or LGBTQ+, which the Exchange believes
would help promote greater diversity on boards of all sizes. See id.
at 11 n.20.
    \109\ See id. at 14.
    \110\ See id. at 15.
---------------------------------------------------------------------------

B. The Comment and Response Letters Received on the Proposals

    The Commission has received comment letters that support the
proposals, comment letters that suggest changes to the proposals, and
comment letters that oppose the proposals.\111\ The Commission has also
received two response letters from the Exchange.\112\
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    \111\ Comments received on the Board Diversity Proposal are
available on the Commission's website at: https://www.sec.gov/comments/sr-nasdaq-2020-081/srnasdaq2020081.htm. Comments received
on the Board Recruiting Service Proposal are available on the
Commission's website at: https://www.sec.gov/comments/sr-nasdaq-2020-082/srnasdaq2020082.htm.
    \112\ See letter from Stephen J. Kastenberg, Ballard Spahr LLP,
to Vanessa Countryman, Secretary, Commission, dated February 5, 2021
(submitted on behalf of the Exchange by its counsel), available at:
https://www.sec.gov/comments/sr-nasdaq-2020-081/srnasdaq2020081-8343758-228925.pdf; letter from John A. Zecca, Executive Vice
President, Chief Legal Officer, and Chief Regulatory Officer,
Nasdaq, to Vanessa A. Countryman, Secretary, Commission, dated
February 26, 2021, available at: https://www.sec.gov/comments/sr-nasdaq-2020-081/srnasdaq2020081-8425992-229601.pdf.
---------------------------------------------------------------------------

IV. Proceedings To Determine Whether To Approve or Disapprove SR-
NASDAQ-2020-081 and SR-NASDAQ-2020-082, as Modified by Amendments No.
1, and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \113\ to determine whether the proposed rule
changes, as modified by Amendments No. 1, should be approved or
disapproved. Institution of such proceedings is appropriate at this
time in view of the issues raised by the proposed rule changes.
Institution of proceedings does not indicate that the Commission has
reached any conclusions with respect to any of the issues involved.
Rather, as described below, the Commission seeks and encourages
interested persons to provide additional comment on the proposed rule
changes, as modified by Amendments No. 1, to inform the Commission's
analysis of whether to approve or disapprove the proposed rule changes,
as modified by Amendments No. 1.
---------------------------------------------------------------------------

    \113\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\114\ the Commission is
providing notice of the grounds for disapproval under consideration. As
described above, the Exchange proposes in the Board Diversity Proposal
to require each of its listed companies, subject to certain exceptions,
to: (i) Provide statistical information regarding the diversity
characteristics among the members of the company's board of directors;
and (ii) if the company does not meet the applicable board diversity
objectives, to disclose an explanation as to why. Also as described
above, the Exchange proposes in the Board Recruiting Service Proposal
to provide certain Nasdaq-listed companies with one-year of
complimentary access to a diverse board candidate recruiting solution.
In addition, as stated above, the Commission has received comment
letters that support the proposals, comment letters that suggest
changes to the proposals, and comment letters that oppose the
proposals, as well as two response letters from the Exchange. Moreover,
on February 26, 2021, the Exchange submitted an amendment to each of
the proposals.
---------------------------------------------------------------------------

    \114\ Id.
---------------------------------------------------------------------------

    The Commission is instituting proceedings to allow for additional
analysis of, and input from commenters with respect to, the consistency
of the proposals, as modified by Amendments

No. 1, with Section 6(b)(5) of the Act,\115\ which requires that the
rules of a national securities exchange be designed, among other
things, to prevent fraudulent and manipulative acts and practices, 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 not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers, or to regulate by virtue of
any authority conferred by the Act matters not related to the purposes
of the Act or the administration of the exchange; and Section 6(b)(8)
of the Act,\116\ which requires that the rules of a national securities
exchange not impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Commission
is instituting proceedings to also allow for additional analysis of,
and input from commenters with respect to, the consistency of the Board
Recruiting Service Proposal, as modified by Amendment No. 1, with
Section 6(b)(4) of the Act,\117\ which requires that the rules of a
national securities exchange provide for the equitable allocation of
reasonable dues, fees, and other charges among its members and issuers
and other persons using its facilities.
---------------------------------------------------------------------------

    \115\ 15 U.S.C. 78f(b)(5).
    \116\ 15 U.S.C. 78f(b)(8).
    \117\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

V. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposals. In particular, the Commission invites the written
views of interested persons concerning whether the proposals, as
modified by Amendments No. 1, are consistent with Sections
6(b)(4),\118\ 6(b)(5) \119\ and 6(b)(8) \120\ of the Act or any other
provision of the Act, or the rules and regulations thereunder. Although
there do not appear to be any issues relevant to approval or
disapproval that would be facilitated by an oral presentation of views,
data, and arguments, the Commission will consider, pursuant to Rule
19b-4 under the Act,\121\ any request for an opportunity to make an
oral presentation.\122\
---------------------------------------------------------------------------

    \118\ Id.
    \119\ 15 U.S.C. 78f(b)(5).
    \120\ 15 U.S.C. 78f(b)(8).
    \121\ 17 CFR 240.19b-4.
    \122\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Acts Amendments of 1975, Senate Comm.
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposals, as modified by Amendments
No. 1, should be approved or disapproved by April 6, 2021. Any person
who wishes to file a rebuttal to any other person's submission must
file that rebuttal by April 20, 2021. 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<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2020-081 or SR-NASDAQ-2020-082 on the subject
line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2020-081 or SR-
NASDAQ-2020-082. 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
changes that are filed with the Commission, and all written
communications relating to the proposed rule changes 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
the 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-2020-081 or SR-NASDAQ-2020-082 and should be submitted by April
6, 2021. Rebuttal comments should be submitted by April 20, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\123\
---------------------------------------------------------------------------

    \123\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(57).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-05343 Filed 3-15-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 139 (Friday, July 21, 2017)]
[Rules and Regulations]
[Pages 33794-33795]
[FR Doc No: 2017-15284]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2017-0070; Airspace Docket No. 17-ASO-2]

Amendment of Class E Airspace; Fayetteville, TN

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This action amends Class E airspace upward from 700 feet or
more above the surface at Fayetteville, TN, as the Kelso non-
directional radio beacon (NDB) has been decommissioned, requiring
airspace reconfiguration at Fayetteville Municipal Airport. This action
enhances the safety and airspace management of instrument flight rules
(IFR) operations at the airport. This action also updates the
geographic coordinates of the airport.

DATES: Effective 0901 UTC, October 12, 2017. The Director of the
Federal Register approves this incorporation by reference action under
title 1, Code of Federal Regulations, part 51, subject to the annual
revision of FAA Order 7400.11 and publication of conforming amendments.

ADDRESSES: FAA Order 7400.11A, Airspace Designations and Reporting
Points, and subsequent amendments can be viewed on-line at http://www.faa.gov/air_traffic/publications/. For further information, you can
contact the Airspace Policy Group, Federal Aviation Administration, 800
Independence Avenue SW., Washington, DC 20591; telephone: 1 (800) 647-
8927, or<PHONE_NUMBER>. The Order is also available for inspection at
the National Archives and Records Administration (NARA). For
information on the availability of FAA Order 7400.11A at NARA, call
(202) 741-6030, or go to http://www.archives.gov/federal_register/code_of_federal-regulations/ibr_locations.html.
    FAA Order 7400.11, Airspace Designations and Reporting Points, is
published yearly and effective on September 15.

FOR FURTHER INFORMATION CONTACT: John Fornito, Operations Support
Group, Eastern Service Center, Federal Aviation Administration, P.O.
Box 20636, Atlanta, GA 30320; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. Subtitle I, Section 106
describes the authority of the FAA Administrator. Subtitle VII,
Aviation Programs, describes in more detail the scope of the agency's
authority. This rulemaking is promulgated under the authority described
in Subtitle VII, Part A, Subpart I, Section 40103. Under that section,
the FAA is charged with prescribing regulations to assign the use of
airspace necessary to ensure the safety of aircraft and the efficient
use of airspace. This regulation is within the scope of that authority
as it amends Class E airspace extending upward from 700 feet above the
surface at Fayetteville Municipal Airport, Fayetteville, TN, for the
continued safety, and management of IFR operations at the airport.

History

    The FAA published a notice of proposed rulemaking (NPRM in the
Federal Register (82 FR 16957, April 7, 2017) Docket No. FAA-2017-0070
proposing to amend Class E airspace extending upward from 700 feet
above the surface at Fayetteville Municipal Airport, Fayetteville, TN,
due to the decommissioning of the Kelso NDB and cancellation of the NDB
approach. The NPRM also proposed amendment of the airport's geographic
coordinates. Interested parties were invited to participate in this
rulemaking effort by submitting written comments on the proposal to the
FAA. No comments were received.
    Class E airspace designations are published in paragraph 6005 of
FAA Order 7400.11A dated August 3, 2016, and effective September 15,
2016, which is incorporated by reference in 14 CFR part 71.1. The Class
E airspace designations listed in this document will be published
subsequently in the Order.

Availability and Summary of Documents for Incorporation by Reference

    This document amends FAA Order 7400.11A, Airspace Designations and
Reporting Points, dated August 3, 2016, and effective September 15,
2016. FAA Order 7400.11A is publicly available as listed in the
ADDRESSES section of this document. FAA Order 7400.11A lists Class A,
B, C, D, and E airspace areas, air traffic service routes, and
reporting points.

The Rule

    This amendment to Title 14, Code of Federal Regulations (14 CFR)
part 71 amends Class E airspace extending upward from 700 feet above
the surface within a 6.6-mile radius of Fayetteville Municipal Airport,
Fayetteville, TN, due to the decommissioning of the Kelso NDB and
cancellation of the NDB approach. Therefore, these changes are
necessary for continued safety and management of IFR operations at the
airport. Also, the geographic coordinates of the airport are amended to
coincide with the FAAs aeronautical database.

Regulatory Notices and Analyses

    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
It, therefore: (1) Is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under DOT
Regulatory Policies and Procedures (44 FR 11034; February 26, 1979);
and (3) does not warrant preparation of a regulatory evaluation as the
anticipated impact is so minimal. Since this is a routine matter that
only affects air traffic procedures and air navigation, it is certified
that this rule, when promulgated, does not have a significant economic
impact on a substantial number of small entities under the criteria of
the Regulatory Flexibility Act.

Environmental Review

    The FAA has determined that this action qualifies for categorical
exclusion under the National Environmental Policy Act in accordance
with FAA Order 1050.1F, ``Environmental Impacts: Policies and
Procedures,'' paragraph 5-6.5a. This airspace action is not expected to
cause any potentially significant environmental impacts, and no
extraordinary circumstances exist that warrant preparation of an
environmental assessment.

Lists of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

Adoption of the Amendment

    In consideration of the foregoing, the Federal Aviation
Administration amends 14 CFR part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for part 71 continues to read as follows:

    Authority:  49 U.S.C. 106(f), 106(g); 40103, 40113, 40120, E.O.
10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.11A,
Airspace Designations and Reporting Points, dated August 3, 2016,
effective September 15, 2016, is amended as follows:

Paragraph 6005 Class E Airspace Areas Extending Upward From 700
Feet or More Above the Surface of the Earth.

* * * * *

ASO TN E5 Fayetteville, TN [Amended]

Fayetteville Municipal Airport, TN
    (Lat. 35[deg]03'35'' N., long. 86[deg]33'50'' W.)

    That airspace extending upward from 700 feet above the surface
within a 6.6-mile radius of Fayetteville Municipal Airport and
within 4 miles each side of the 014[deg] bearing from airport,
extending from the 6.6-mile radius to 10.1-miles north of the
airport.

    Issued in College Park, Georgia, on July 11, 2017.
Ryan W. Almasy,
Manager, Operations Support Group, Eastern Service Center, Air Traffic
Organization.
[FR Doc. 2017-15284 Filed 7-20-17; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register: May 5, 2010 (Volume 75, Number 86)]
[Notices]
[Page 24707]
[DOCID:fr05my10-95]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2009-N-0483]

Agency Information Collection Activities; Announcement of Office
of Management and Budget Approval; Medical Device User Fee Cover
Sheet--Form FDA 3601

AGENCY:  Food and Drug Administration, HHS.

ACTION:  Notice.

-----------------------------------------------------------------------

SUMMARY:  The Food and Drug Administration (FDA) is announcing that a
collection of information entitled ``Medical Device User Fee Cover
Sheet--Form FDA 3601'' has been approved by the Office of Management
and Budget (OMB) under the Paperwork Reduction Act of 1995.

FOR FURTHER INFORMATION CONTACT: Daniel Gittleson, Office of
Information Management, Food and Drug Administration, 1350 Piccard Dr.,
PI50-400B, Rockville, MD 20850,<PHONE_NUMBER>,
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: In the Federal Register of January 19, 2010
(75 FR 2866), the agency announced that the proposed information
collection had been submitted to OMB for review and clearance under 44
U.S.C. 3507. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays
a currently valid OMB control number. OMB has now approved the
information collection and has assigned OMB control number 0910-0511.
The approval expires on February 28, 2013. A copy of the supporting
statement for this information collection is available on the Internet
at http://www.reginfo.gov/public/do/PRAMain.

    Dated: April 29, 2010.
Leslie Kux,
Acting Assistant Commissioner for Policy.
[FR Doc. 2010-10579 Filed 5-4-10; 8:45 am]
BILLING CODE 4160-01-S


[Federal Register Volume 83, Number 188 (Thursday, September 27, 2018)]
[Notices]
[Pages 48809-48810]
[FR Doc No: 2018-21061]

=======================================================================
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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 6470-006]

Winooski Hydroelectric Company; Notice of Intent To File License
Application, Filing of Pre-Application Document, and Approving Use of
the Traditional Licensing Process

    a. Type of Filing: Notice of Intent to File License Application and
Request to Use the Traditional Licensing Process.
    b. Project No.: 6470-006.
    c. Date Filed: July 31, 2018.
    d. Submitted By: Winooski Hydroelectric Company.
    e. Name of Project: Winooski 8 Hydroelectric Project.
    f. Location: On the Winooski River in Washington County, Vermont.
No federal lands are occupied by the project works or located within
the project boundary.
    g. Filed Pursuant to: 18 CFR 5.3 of the Commission's regulations.
    h. Potential Applicant Contact: Mathew Rubin, General Partner,
Winooski Hydroelectric Company, 26 State Street, Montpelier, Vermont
05602;<PHONE_NUMBER>; or email at [email protected].
    i. FERC Contact: Mike Tust at<PHONE_NUMBER>; or email at
[email protected].
    j. Winooski Hydroelectric Company (Winooski Hydro) filed its
request to use

the Traditional Licensing Process on July 31, 2018. Winooski Hydro
provided public notice of its request on July 24, 2018. In a letter
dated September 21, 2018, the Director of the Division of Hydropower
Licensing approved Winooski Hydro's request to use the Traditional
Licensing Process.
    k. With this notice, we are initiating informal consultation with
the U.S. Fish and Wildlife Service and/or NOAA Fisheries under section
7 of the Endangered Species Act and the joint agency regulations
thereunder at 50 CFR part 402; and NOAA Fisheries under section 305(b)
of the Magnuson-Stevens Fishery Conservation and Management Act and
implementing regulations at 50 CFR 600.920. We are also initiating
consultation with the Vermont State Historic Preservation Officer, as
required by section 106, National Historic Preservation Act, and the
implementing regulations of the Advisory Council on Historic
Preservation at 36 CFR 800.2.
    l. With this notice, we are designating Winooski Hydro as the
Commission's non-federal representative for carrying out informal
consultation pursuant to section 7 of the Endangered Species Act and
section 305(b) of the Magnuson-Stevens Fishery Conservation and
Management Act; and consultation pursuant to section 106 of the
National Historic Preservation Act.
    m. Winooski Hydro filed a Pre-Application Document (PAD; including
a proposed process plan and schedule) with the Commission, pursuant to
18 CFR 5.6 of the Commission's regulations.
    n. A copy of the PAD is available for review at the Commission in
the Public Reference Room or may be viewed on the Commission's website
(http://www.ferc.gov), using the ``eLibrary'' link. Enter the docket
number, excluding the last three digits in the docket number field to
access the document. For assistance, contact FERC Online Support at
[email protected],<PHONE_NUMBER> (toll free), or (202) 502-
8659 (TTY). A copy is also available for inspection and reproduction at
the address in paragraph h.
    o. The licensee states its unequivocal intent to submit an
application for a new license for Project No. 6470. Pursuant to 18 CFR
16.8, 16.9, and 16.10 each application for a new license and any
competing license applications must be filed with the Commission at
least 24 months prior to the expiration of the existing license. All
applications for license for this project must be filed by July 31,
2021.
    p. Register online at http://www.ferc.gov/docs-filing/esubscription.asp to be notified via email of new filing and issuances
related to this or other pending projects. For assistance, contact FERC
Online Support.

    Dated: September 21, 2018.
Kimberly D. Bose,
Secretary.
[FR Doc. 2018-21061 Filed 9-26-18; 8:45 am]
BILLING CODE 6717-01-P