Appendix H. Hardness Slopes As discussed in Section XX, EPA's earlier freshwater copper criteria recommendations were hardness dependent values. Although characterized as ` hardness dependent' EPA recognized that these adjusted criteria not only reflected the influence of hardness on copper toxicity, but also, hardness was a surrogate for other co varying water quality parameters. In order to compare the new BLM based criteria with an updated hardness dependent criteria an overall or ` pooled slope' was needed to normalize the acute toxicity data to a standard hardness for calculating criteria. A pooled hardness slope was derived using all appropriate acute toxicity data, regardless of the quality rating assigned, according to the procedures in the 1985 Guidelines.

To account for the apparent relationship of copper acute toxicity to hardness, an analysis of covariance ( Dixon and Brown 1979; Neter and Wasserman 1974) was performed using WINKS statistical software ( WINKS ETC) to calculated the pooled slope for hardness using the natural logarithm of the acute value as the dependent variable, species as the treatment or grouping variable, and the natural logarithm of hardness as the covariate or independent variable. The pooled slope is a regression slope from a pooled data set, where every variable is adjusted relative to its mean. The species are adjusted separately, then pooled for a single conventional least squares regression analysis. The slope of the regression line is the best estimate of the allspecies relationship between toxicity and hardness.

This analysis of covariance model was fit to the data contained in this appendix for the seven species for which definitive acute values are available over a range of hardness such that the highest hardness is at least three time the lowest, and the highest is also at least 100 mg/ L higher than the lowest. Other species either did not meet these criteria, the organisms were fed or as with D. pulex, D. pulicaria and H. azteca did not show any hardness toxicity trend possibly due to differences in exposure methods such as unusual chemical composition of the dilution water.

A list of the species, acute toxicity and hardness values and the slopes used to estimate the pooled hardness slope are included in this appendix. The slopes for the seven species ranged from 0.4349 to 0.8963, and the pooled slope for these seven species was 0.9584. An F test was used to test whether a model with separate species slopes for each species gives significantly better fit to the data than the model with parallel slopes. This test showed that the separate slopes model is not significantly better, and therefore the slopes are not significantly different than the overall pooled slope ( P= 0.39). Appendix G. Hardness Slopes Species n Slope R2 Value Degrees of Freedom Ceriodaphnia dubia 27 0.8821 0.6063 0.5893 1.1749 25 Daphnia magna 46 0.7495 0.6174 0.5702 0.9288 44 Oncorhynchus clarki 11 0.6461 0.4184 0.0717 1.2204 9 Oncorhynchus mykiss 56 0.6245 0.6557 0.5010 0.7480 54 Oncorhynchus tshawytscha 12 0.8963 0.6064 0.3875 1.4051 10 Pimephales promelas 159 0.4349 0.4447 0.3583 0.5116 157 Lepomis macrochirus 6 0.7282 0.8499 0.3033 1.1531 4 All of the above 317 0.9584 0.5098 0.8542 1.0625 303 ( p = 0.389) 95% Confidence Limits Results of Covariance Analysis of Freshwater Acute Toxicity Versus Hardness G 2 Appendix G. Hardness Slopes Species Lifestage Method Hardness ( mg/ L as CaCO3) LC50 or EC50 Total ( ug/ L) Reference Ceriodaphnia dubia < 4 h S, M, T 52 19.00 Carlson et al. 1986 Ceriodaphnia dubia < 4 h S, M, T 52 17.00 Carlson et al. 1986 Ceriodaphnia dubia < 4 h S, M, T 36 20.00 Carlson et al. 1986 Ceriodaphnia dubia < 4 h S, M, T 36 18.00 Carlson et al. 1986 Ceriodaphnia dubia < 12 h S, M, D 45 26.04 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 45 17.71 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 45 31.25 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 45 25.00 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 45 29.17 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 45 33.33 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 45 23.96 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 45 20.83 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 45 19.79 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 94.1 27.08 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 94.1 21.88 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 94.1 28.13 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 94.1 38.54 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 94.1 35.42 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 179 69.79 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 179 39.58 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 179 81.25 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 179 84.38 Belanger et al. 1989 Ceriodaphnia dubia < 12 h S, M, D 97.6 14.58 Belanger & Cherry 1990 Ceriodaphnia dubia < 12 h S, M, D 97.6 29.17 Belanger & Cherry 1990 Ceriodaphnia dubia < 12 h S, M, D 97.6 32.29 Belanger & Cherry 1990 Ceriodaphnia dubia < 12 h S, M, D 182 58.33 Belanger & Cherry 1990 Ceriodaphnia dubia < 12 h S, M, D 182 87.50 Belanger & Cherry 1990 Daphnia magna < 24 h S, M, T, I 100 31.80 Borgmann & Ralph 1983 Daphnia magna < 24 h S, M, I 100 35.60 Borgmann & Charlton 1984 Daphnia magna 1 d S, M, T 39 9.10 Nebeker et al. 1986a Daphnia magna 1 d S, M, T 39 11.70 Nebeker et al. 1986a Daphnia magna < 2 h S, M, T 38 6.60 Nebeker et al. 1986a Daphnia magna < 2 h S, M, T 38 9.90 Nebeker et al. 1986a Daphnia magna 1 d S, M, T 39 11.70 Nebeker et al. 1986a Daphnia magna < 4 h S, M, T 39 6.70 Nebeker et al. 1986a Daphnia magna 1 d S, M, T 26 9.10 Nebeker et al. 1986a Daphnia magna < 2 h S, M, T 27 5.20 Nebeker et al. 1986a Daphnia magna < 24 h S, M, T 170 41.20 Baird et al. 1991 Daphnia magna < 24 h S, M, T 170 10.50 Baird et al. 1991 Daphnia magna < 24 h S, M, T 170 20.60 Baird et al. 1991 Daphnia magna < 24 h S, M, T 170 17.30 Baird et al. 1991 Daphnia magna < 24 h S, M, T 170 70.70 Baird et al. 1991 Daphnia magna < 24 h S, M, T 170 31.30 Baird et al. 1991 Daphnia magna < 24 h S, M, I 109.9 7.10 Meador 1991 Daphnia magna < 24 h S, M, I 109.9 16.40 Meador 1991 Daphnia magna < 24 h S, M, I 109.9 39.90 Meador 1991 Daphnia magna < 24 h S, M, I 109.9 18.70 Meador 1991 Daphnia magna < 24 h S, M, I 109.9 18.90 Meador 1991 Daphnia magna < 24 h S, M, I 109.9 39.70 Meador 1991 Daphnia magna < 24 h S, M, I 109.9 46.00 Meador 1991 Daphnia magna < 24 h S, M, I 109.9 71.90 Meador 1991 Daphnia magna < 24 h S, M, I 109.9 57.20 Meador 1991 Daphnia magna < 24 h S, M, I 109.9 67.80 Meador 1991 Daphnia magna < 24 h R, M, T 170 31.00 Lazorchak & Waller 1993 Daphnia magna < 24 h R, M, T 170 38.00 Lazorchak & Waller 1993 Daphnia magna < 24 h R, M, T 170 35.00 Lazorchak & Waller 1993 Daphnia magna < 24 h R, M, T 170 58.00 Lazorchak & Waller 1993 Daphnia magna < 24 h R, M, T 170 37.00 Lazorchak & Waller 1993 Daphnia magna < 24 h R, M, T 170 51.00 Lazorchak & Waller 1993 Daphnia magna < 24 h R, M, T 170 39.00 Lazorchak & Waller 1993 Daphnia magna < 24 h R, M, T 170 50.00 Lazorchak & Waller 1993 Daphnia magna < 24 h R, M, T 170 52.00 Lazorchak & Waller 1993 Daphnia magna < 24 h R, M, T 170 31.00 Lazorchak & Waller 1993 Daphnia magna < 24 h R, M, T 170 30.00 Lazorchak & Waller 1993 Daphnia magna < 24 h R, M, T 170 46.00 Lazorchak & Waller 1993 Daphnia magna < 24 h R, M, T 170 63.00 Lazorchak & Waller 1993 Daphnia magna < 24 h S, M, T 52 26.00 Chapman et al. Manuscript Daphnia magna < 24 h S, M, T 105 30.00 Chapman et al. Manuscript G 3 Appendix G. Hardness Slopes Species Lifestage Method Hardness ( mg/ L as CaCO3) LC50 or EC50 Total ( ug/ L) Reference Daphnia magna < 24 h S, M, T 106 38.00 Chapman et al. Manuscript Daphnia magna < 24 h S, M, T 207 69.00 Chapman et al. Manuscript Daphnia magna < 24 h S, M, T, D 7.1 4.80 Long's MS Thesis Daphnia magna < 24 h S, M, T, D 20.6 7.40 Long's MS Thesis Daphnia magna < 24 h S, M, T, D 23 6.50 Long's MS Thesis Oncorhynchus clarki larval, 0.34 g S, M, T 169 80.00 Dwyer et al. 1995 Oncorhynchus clarki larval, 0.57 g S, M, T 169 60.00 Dwyer et al. 1995 Oncorhynchus clarki 7.4 cm, 4.2 g F, M, T, D 205 398.91 Chakoumakos et al. 1979 Oncorhynchus clarki 6.9 cm, 3.2 g F, M, T, D 69.9 197.87 Chakoumakos et al. 1979 Oncorhynchus clarki 8.8 cm, 9.7 g F, M, T, D 18 41.35 Chakoumakos et al. 1979 Oncorhynchus clarki 8.1 cm, 4.4 g F, M, T, D 204 282.93 Chakoumakos et al. 1979 Oncorhynchus clarki 6.8 cm, 2.7 g F, M, T, D 83 186.21 Chakoumakos et al. 1979 Oncorhynchus clarki 7.0 cm, 3.2 g F, M, T, D 31.4 85.58 Chakoumakos et al. 1979 Oncorhynchus clarki 8.5 cm, 5.2 g F, M, T, D 160 116.67 Chakoumakos et al. 1979 Oncorhynchus clarki 7.7 cm, 4.4 g F, M, T, D 74.3 56.20 Chakoumakos et al. 1979 Oncorhynchus clarki 8.9 cm, 5.7 g F, M, T, D 26.4 21.22 Chakoumakos et al. 1979 Oncorhynchus mykiss larval, 0.67 g S, M, T 169 110.00 Dwyer et al. 1995 Oncorhynchus mykiss larval, 0.48 g S, M, T 169 50.00 Dwyer et al. 1995 Oncorhynchus mykiss larval, 0.50 g S, M, T 169 60.00 Dwyer et al. 1995 Oncorhynchus mykiss swim up, 0.25 g R, M, T, D 44.1 46.70 Cacela et al. 1996 Oncorhynchus mykiss swim up, 0.25 g R, M, T, D 44.6 24.20 Cacela et al. 1996 Oncorhynchus mykiss swim up, 0.20 0.24 g R, M, T, D 38.7 3.54 Welsh et al. 2000 Oncorhynchus mykiss swim up, 0.20 0.24 g R, M, T, D 39.3 8.44 Welsh et al. 2000 Oncorhynchus mykiss swim up, 0.20 0.24 g R, M, T, D 89.5 17.92 Welsh et al. 2000 Oncorhynchus mykiss swim up, 0.20 0.24 g R, M, T, D 89.67 33.33 Welsh et al. 2000 Oncorhynchus mykiss 12 16 cm F, M 300 890.00 Calamari & Marchetti 1973 Oncorhynchus mykiss alevin F, M, T 23 28.00 Chapman 1975, 1978 Oncorhynchus mykiss swim up, 0.17 g F, M, T 23 17.00 Chapman 1975, 1978 Oncorhynchus mykiss parr, 8.6 cm, 6.96 g F, M, T 23 18.00 Chapman 1975, 1978 Oncorhynchus mykiss smolt, 18.8 cm, 68.19 g F, M, T 23 29.00 Chapman 1975, 1978 Oncorhynchus mykiss 1.2 7.9 g F, M, T, D 335 106.25 Fogels & Sprague 1977 Oncorhynchus mykiss juvenile, 3.9 g F, M, T 125 200.00 Spear 1977, Anderson & Spear 1980b Oncorhynchus mykiss juvenile, 29.1 g F, M, T 125 190.00 Spear 1977, Anderson & Spear 1980b Oncorhynchus mykiss adult, 176 g F, M, T 125 210.00 Spear 1977, Anderson & Spear 1980b Oncorhynchus mykiss 1.1 g F, M, T, D 32 23.33 Howarth & Sprague 1978 Oncorhynchus mykiss 2.2 g F, M, T, D 31 30.10 Howarth & Sprague 1978 Oncorhynchus mykiss 1.4 g F, M, T, D 31 31.25 Howarth & Sprague 1978 Oncorhynchus mykiss 2.7 g F, M, T, D 30 31.25 Howarth & Sprague 1978 Oncorhynchus mykiss 3.2 g F, M, T, D 101 41.67 Howarth & Sprague 1978 Oncorhynchus mykiss 0.71 g F, M, T, D 99 34.48 Howarth & Sprague 1978 Oncorhynchus mykiss 0.80 g F, M, T, D 102 31.98 Howarth & Sprague 1978 Oncorhynchus mykiss 1.5 g F, M, T, D 101 48.23 Howarth & Sprague 1978 Oncorhynchus mykiss 1.6 g F, M, T, D 99 49.90 Howarth & Sprague 1978 Oncorhynchus mykiss 1.5 g F, M, T, D 100 50.10 Howarth & Sprague 1978 Oncorhynchus mykiss 10 g F, M, T, D 100 84.48 Howarth & Sprague 1978 Oncorhynchus mykiss 1.0 g F, M, T, D 98 89.48 Howarth & Sprague 1978 Oncorhynchus mykiss 1.0 g F, M, T, D 366 72.92 Howarth & Sprague 1978 Oncorhynchus mykiss 1.7 g F, M, T, D 371 85.63 Howarth & Sprague 1978 Oncorhynchus mykiss 6.6 g F, M, T, D 361 310.42 Howarth & Sprague 1978 Oncorhynchus mykiss 1.8 g F, M, T, D 371 537.50 Howarth & Sprague 1978 Oncorhynchus mykiss 0.90 g F, M, T, D 360 321.88 Howarth & Sprague 1978 Oncorhynchus mykiss 3.1 g F, M, T, D 364 115.63 Howarth & Sprague 1978 Oncorhynchus mykiss 1 g F, M, T, D 194 176.04 Chakoumakos et al. 1979 Oncorhynchus mykiss 4.9 cm F, M, T, D 194 88.85 Chakoumakos et al. 1979 Oncorhynchus mykiss 6.0 cm, 2.1 g F, M, T, D 194 86.77 Chakoumakos et al. 1979 Oncorhynchus mykiss 6.1 cm, 2.5 g F, M, T, D 194 107.29 Chakoumakos et al. 1979 Oncorhynchus mykiss 2.6 g F, M, T, D 194 285.42 Chakoumakos et al. 1979 Oncorhynchus mykiss 4.3 g F, M, T, D 194 133.33 Chakoumakos et al. 1979 Oncorhynchus mykiss 9.2 cm, 9.4 g F, M, T, D 194 230.21 Chakoumakos et al. 1979 Oncorhynchus mykiss 9.9 cm, 11.5 g F, M, T, D 194 171.88 Chakoumakos et al. 1979 Oncorhynchus mykiss 11.8 cm, 18.7 g F, M, T, D 194 205.21 Chakoumakos et al. 1979 Oncorhynchus mykiss 13.5 cm, 24.9 g F, M, T, D 194 535.42 Chakoumakos et al. 1979 Oncorhynchus mykiss 13.4 cm, 25.6 g F, M, T, D 194 253.13 Chakoumakos et al. 1979 Oncorhynchus mykiss 6.7 cm, 2.65 g F, M, T 9.2 2.80 Cusimano et al. 1986 Oncorhynchus mykiss 134 g F, M, T 120 80.00 Seim et al. 1984 Oncorhynchus mykiss parr F, M, T, D, I 31 90.00 Mudge et al. 1993 Oncorhynchus mykiss swim up, 0.29 g F, M, T, D 36.1 19.60 Cacela et al. 1996 G 4 Appendix G. Hardness Slopes Species Lifestage Method Hardness ( mg/ L as CaCO3) LC50 or EC50 Total ( ug/ L) Reference Oncorhynchus mykiss swim up, 0.25 g F, M, T, D 36.2 12.90 Cacela et al. 1996 Oncorhynchus mykiss swim up, 0.23 g F, M, T, D 20.4 5.90 Cacela et al. 1996 Oncorhynchus mykiss swimup, 0.23 g F, M, T, D 45.2 37.80 Cacela et al. 1996 Oncorhynchus mykiss swim up, 0.26 g F, M, T, D 45.4 25.10 Cacela et al. 1996 Oncorhynchus mykiss swim up, 0.23 g F, M, T, D 41.9 17.20 Cacela et al. 1996 Oncorhynchus tshawytscha alevin, 0.05 g F, M, T 23 26.00 Chapman 1975, 1978 Oncorhynchus tshawytscha swim up, 0.23 g F, M, T 23 19.00 Chapman 1975, 1978 Oncorhynchus tshawytscha parr, 9.6 cm, 11.58 g F, M, T 23 38.00 Chapman 1975, 1978 Oncorhynchus tshawytscha smolt, 14.4 cm, 32.46 g F, M, T 23 26.00 Chapman 1975, 1978 Oncorhynchus tshawytscha 3 mo, 1.35 g F, M, T, I 13 10.20 Chapman & McCrady 1977 Oncorhynchus tshawytscha 3 mo, 1.35 g F, M, T, I 46 24.10 Chapman & McCrady 1977 Oncorhynchus tshawytscha 3 mo, 1.35 g F, M, T, I 182 82.50 Chapman & McCrady 1977 Oncorhynchus tshawytscha 3 mo, 1.35 g F, M, T, I 359 128.40 Chapman & McCrady 1977 Oncorhynchus tshawytscha swim up, 0.36 0.45 g F, M, T, D 36.6 7.71 Welsh et al. 2000 Oncorhynchus tshawytscha swim up, 0.36 0.45 g F, M, T, D 34.6 13.02 Welsh et al. 2000 Oncorhynchus tshawytscha swim up, 0.36 0.45 g F, M, T, D 38.3 14.90 Welsh et al. 2000 Oncorhynchus tshawytscha swim up, 0.36 0.45 g F, M, T, D 35.7 19.06 Welsh et al. 2000 Pimephales promelas adult, 40 mm S, M, T 103 310.00 Birge et al. 1983 Pimephales promelas adult, 40 mm S, M, T 103 120.00 Birge et al. 1983 Pimephales promelas adult, 40 mm S, M, T 262 390.00 Birge et al. 1983; Benson & Birge 1985 Pimephales promelas  S, M, T 52 55.00 Carlson et al. 1986 Pimephales promelas  S, M, T 52 85.00 Carlson et al. 1986 Pimephales promelas  S, M, T 36 180.00 Carlson et al. 1986 Pimephales promelas  S, M, T 36 95.00 Carlson et al. 1986 Pimephales promelas < 24 h S, M, T 290 15.00 Schubauer Berigan et al. 1993 Pimephales promelas < 24 h S, M, T 290 44.00 Schubauer Berigan et al. 1993 Pimephales promelas < 24 h S, M, T 290 200.00 Schubauer Berigan et al. 1993 Pimephales promelas < 24 h, 0.68 mg S, M, T 19 4.82 Welsh et al. 1993 Pimephales promelas < 24 h, 0.68 mg S, M, T 19.5 8.20 Welsh et al. 1993 Pimephales promelas < 24 h, 0.68 mg S, M, T 16.5 31.57 Welsh et al. 1993 Pimephales promelas < 24 h, 0.68 mg S, M, T 17 21.06 Welsh et al. 1993 Pimephales promelas < 24 h, 0.68 mg S, M, T 19 35.97 Welsh et al. 1993 Pimephales promelas < 24 h, 0.68 mg S, M, T 17 59.83 Welsh et al. 1993 Pimephales promelas < 24 h, 0.68 mg S, M, T 17 4.83 Welsh et al. 1993 Pimephales promelas < 24 h, 0.68 mg S, M, T 17.5 70.28 Welsh et al. 1993 Pimephales promelas < 24 h, 0.68 mg S, M, T 18.5 83.59 Welsh et al. 1993 Pimephales promelas < 24 h, 0.68 mg S, M, T 18.5 182.00 Welsh et al. 1993 Pimephales promelas larval, 0.32 g S, M, T 173 290.00 Dwyer et al. 1995 Pimephales promelas larval, 0.56 g S, M, T 173 630.00 Dwyer et al. 1995 Pimephales promelas larval, 0.45 g S, M, T 173 400.00 Dwyer et al. 1995 Pimephales promelas larval, 0.39 g S, M, T 173 390.00 Dwyer et al. 1995 Pimephales promelas 3.2 5.5 cm, 0.42 3.23 g S, M, T 165 450.00 Richards & Beitinger 1995 Pimephales promelas 2.8 5.1 cm, 0.30 2.38 g S, M, T 159 297.00 Richards & Beitinger 1995 Pimephales promelas 1.9 4.6 cm, 0.13 1.55 g S, M, T 168 311.00 Richards & Beitinger 1995 Pimephales promelas 3.0 4.8 cm, 0.23 1.36 g S, M, T 167 513.00 Richards & Beitinger 1995 Pimephales promelas < 24 h S, M, T, D 45.540586 62.23 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 45.540586 190.50 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 44.539694 68.58 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 44.539694 168.91 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 44.539694 94.62 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 45.540586 143.51 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 45.04014 120.65 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 45.04014 196.85 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 138.123096 133.35 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 151.134692 184.15 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 138.123096 304.80 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 139.123988 292.10 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 47.041924 133.35 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 37.033004 92.71 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 60.05352 152.40 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 76.067792 177.80 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 103.091876 203.20 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 103.091876 190.50 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 107.095444 196.85 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 134.119528 234.95 Erickson et al. 1996a, b G 5 Appendix G. Hardness Slopes Species Lifestage Method Hardness ( mg/ L as CaCO3) LC50 or EC50 Total ( ug/ L) Reference Pimephales promelas < 24 h S, M, T, D 45.04014 146.05 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 46.041032 171.45 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 45.04014 152.40 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 45.04014 184.15 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 44.039248 203.20 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 45.04014 203.20 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 46.041032 203.20 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 189.168588 222.25 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 46.041032 146.05 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 75.0669 139.70 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 46.041032 139.70 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 74.066008 152.40 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 133.118636 203.20 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 76.067792 196.85 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 134.119528 266.70 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 52.046384 99.06 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 51.045492 111.13 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 50.0446 78.74 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 51.045492 92.71 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 51.045492 85.09 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 53.047276 123.19 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 53.047276 165.10 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 52.046384 190.50 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 47.041924 165.10 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 47.041924 127.00 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 47.041924 92.08 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 47.041924 66.68 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 140.12488 393.70 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 88.078496 317.50 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 59.052628 107.95 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 41.036572 67.95 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 27.024084 45.72 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 43.038356 177.80 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 25.0223 13.97 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 107.095444 304.80 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 87.077604 71.12 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 85.07582 83.82 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 88.078496 104.78 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 87.077604 139.70 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 87.077604 152.40 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 87.077604 260.35 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 87.077604 488.95 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 87.077604 203.20 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 251.223892 704.85 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 252.224784 952.50 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 252.224784 1244.60 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 251.223892 1485.90 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 200.1784 781.05 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 140.12488 476.25 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 90.08028 273.05 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 19.016948 22.23 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 34.030328 24.13 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 51.045492 36.83 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 29.025868 27.94 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 30.02676 26.67 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 27.024084 20.32 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 27.024084 26.67 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 90.08028 190.50 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 60.05352 109.86 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 120.10704 203.20 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 180.16056 209.55 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 91.081172 146.05 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 90.08028 165.10 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 93.082956 254.00 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 92.082064 311.15 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 91.081172 165.10 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 144.128448 920.75 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 292.260464 1073.15 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 440.39248 1003.30 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 217.193564 933.45 Erickson et al. 1996a, b G 6 Appendix G. Hardness Slopes Species Lifestage Method Hardness ( mg/ L as CaCO3) LC50 or EC50 Total ( ug/ L) Reference Pimephales promelas < 24 h S, M, T, D 218.194456 742.95 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 212.189104 1879.60 Erickson et al. 1996a, b Pimephales promelas < 24 h S, M, T, D 92.082064 266.70 Erickson et al. 1996a, b Pimephales promelas adult F, M, T 198 470.00 Mount 1968 Pimephales promelas  F, M, T 31 75.00 Mount & Stephan 1969 Pimephales promelas 5.6 cm, 1.6 g F, M, T 200 440.00 Geckler et al. 1976 Pimephales promelas 4.7 cm F, M, T 200 490.00 Geckler et al. 1976 Pimephales promelas fry, 6 wk, 2.2 cm F, M, T 202 490.00 Pickering et al. 1977 Pimephales promelas subadult, 6 mo, 5.5 cm F, M, T 202 460.00 Pickering et al. 1977 Pimephales promelas  F, M, T 48 114.00 Lind et al. Manuscript ( 1978) Pimephales promelas  F, M, T 45 121.00 Lind et al. Manuscript ( 1978) Pimephales promelas  F, M, T 46 88.50 Lind et al. Manuscript ( 1978) Pimephales promelas  F, M, T 30 436.00 Lind et al. Manuscript ( 1978) Pimephales promelas  F, M, T 37 516.00 Lind et al. Manuscript ( 1978) Pimephales promelas  F, M, T 87 1586.00 Lind et al. Manuscript ( 1978) Pimephales promelas  F, M, T 73 1129.00 Lind et al. Manuscript ( 1978) Pimephales promelas  F, M, T 84 550.00 Lind et al. Manuscript ( 1978) Pimephales promelas  F, M, T 66 1001.00 Lind et al. Manuscript ( 1978) Pimephales promelas 30 d, 0.15 g F, M, T, D 43.9 96.00 Spehar & Fiandt 1986 Pimephales promelas 60 90 d, 3.3 cm, 0.7 g S, M, T 101 252.00 Bennett et al. 1995 Pimephales promelas < 24 h F, M, T, D 47.041924 31.75 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 243.216756 117.48 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 255.727906 48.26 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 47.041924 73.03 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 45.04014 59.06 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 45.04014 78.74 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 45.540586 22.23 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 49.043708 6.99 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 45.04014 22.23 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 43.038356 107.32 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 45.540586 292.10 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 45.04014 81.28 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 45.04014 298.45 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 45.540586 241.30 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 45.04014 133.35 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 44.039248 93.98 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 44.039248 67.95 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 22.52007 4.76 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 24.021408 13.97 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 23.020516 29.85 Erickson et al. 1996a, b Pimephales promelas < 24 h F, M, T, D 21.519178 59.69 Erickson et al. 1996a, b Lepomis macrochirus 3.58 cm, 0.63 g R, M, D 85 2291.67 Blaylock et al. 1985 Lepomis macrochirus 12 cm, 35 g F, M, T 45 1100.00 Benoit 1975 Lepomis macrochirus 10.3 cm, 18.6 g F, M, T 200 8300.00 Geckler et al. 1976 Lepomis macrochirus 10.1 cm, 19.2 g F, M, T 200 10000.00 Geckler et al. 1976 Lepomis macrochirus 2.8 6.8 cm F, M, T 25.9 1000.00 Cairns et al. 1981 Lepomis macrochirus 3.58 cm, 0.63 g F, M, D 85 1354.17 Blaylock et al. 1985 G 7 Appendix G. Hardness Slopes SUMMARY OUTPUT Overall Slope Regression Statistics Multiple R 0.714033268 R Square 0.509843507 Adjusted R Square 0.508287455 St& ard Error 0.744214128 Observations 317 ANOVA df SS MS F Significance F Regression 1 181.4715328 181.4715328 327.651897 1.05959E 50 Residual 315 174.4642206 0.553854669 Total 316 355.9357534 Coefficients St& ard Error t Stat P value Lower 95% Upper 95% Intercept  1.34057E 15 0.04179923  3.20717E 14 1  0.082240968 0.082240968 X Variable 1 0.958366107 0.052945018 18.10115734 1.05959E 50 0.854195537 1.062536676 G 8


[Federal Register Volume 77, Number 13 (Friday, January 20, 2012)]
[Notices]
[Pages 3021-3024]
[FR Doc No: 2012-1045]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66159; File No. SR-NASDAQ-2012-002]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Proposed Rule Change To Adopt an Alternative to the
$4 Initial Listing Bid Price Requirement for the Nasdaq Capital Market
of Either $2 or $3, if Certain Other Listing Requirements Are Met

January 13, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on January 3, 2012, The NASDAQ Stock Market LLC (``Nasdaq'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I and II below, which Items have been
prepared by Nasdaq. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Nasdaq proposes to adopt an alternative to the $4 initial listing
bid price requirement for the Nasdaq Capital Market. The text of the
proposed rule change is available on the Nasdaq's Web site at http://www.nasdaq.cchwallstreet.com, at Nasdaq's principal office, and at the
Commission's Public Reference Room. Nasdaq will implement the proposed
rule change upon approval.

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

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

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

1. Purpose
    Nasdaq proposes to adopt an alternative to the minimum $4 price
requirement for companies seeking to list on the Capital Market which
meet the express exclusion from the definition of a ``penny stock''
contained in Exchange Act Rule 3a51-1(g).\3\
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    \3\ 17 CFR 240.3a51-1(g).
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    Nasdaq is seeking to make this change to enhance the competition
among exchanges for companies with securities priced between $2 and $4.
While Section 11A of the Act \4\ reflects a Congressional finding that
it ``is in the public interest and appropriate for the protection of
investors and the maintenance of fair and orderly markets to assure * *
* fair competition * * * among exchange markets,'' currently the only
exchange listing alternative available to these companies is NYSE Amex,
which has listing standards permitting the listing of companies at
either $2 or $3.\5\ Nasdaq is unable to adopt an identical requirement
for the Capital Market because of changes the Commission made to the
Penny Stock

Rules in 2005,\6\ which would treat securities listed on the Capital
Market as ``penny stocks'' if Nasdaq adopted the identical requirement.
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    \4\ 15 U.S.C. 78k-1.
    \5\ Section 102(b) of the NYSE Amex Company Guide.
    \6\ Securities Exchange Act Release No. 51983 (July 7, 2005) 70
FR 40614 (July 13, 2005).
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    A number of companies have indicated a preference to initially list
on the Capital Market instead of NYSE Amex and have expressed
frustration at their inability to do so without reverse splitting their
stock.\7\ Nasdaq has previously requested that the Commission modify
its rules to eliminate this arbitrary regulatory disparity. In fact, as
early as 2004, Nasdaq noted that the then proposed changes to the penny
stock rules--which created a ``grandfather'' for Amex stocks and which
were ultimately adopted by the Commission--would memorialize an unfair
competitive advantage for Amex that is not available to other
exchanges.\8\ The Commission rejected Nasdaq's call for a uniform
approach to all exchanges.\9\
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    \7\ Some companies have indicated that they would not consider a
reverse stock split unless there was an underlying business
rationale to support it. Other companies are unable to reverse split
their stock and maintain qualification with the public float
requirement for listing.
    \8\ See Comment of Edward S. Knight, Nasdaq (March 18, 2004)
regarding Proposed Amendments to the Penny Stock Rules, Securities
Exchange Act Release No. 49037 (January 8, 2004), 69 FR 2531
(January 16, 2004) (available at http://www.sec.gov/rules/proposed/s70204/s70704-5.pdf).
    \9\ Securities Exchange Act Release No. 51983, supra. In
rejecting Nasdaq's comment, the Commission stated its belief that
the rule would maintain the status quo. This conclusion was
incorrect, however, as the status quo would have permitted Nasdaq to
maintain its penny stock exclusion if it modified its listing
standards to adopt the same requirements as NYSE Amex, whereas the
new Commission rule did not.
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    In a petition filed in May 2010, Nasdaq again requested that the
Commission act to eliminate the competitive advantage provided NYSE
Amex by the grandfather provision, including, if it felt appropriate,
by abrogating the NYSE Amex rule and requiring NYSE Amex to adopt the
same minimum $4 initial listing price currently applicable to
Nasdaq.\10\ The Commission has not acted on this request and has not
provided any rationale for its delay.
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    \10\ See Request for Rulemaking to Allow the Nasdaq Capital
Market to Adopt Initial Listing Price Requirements Identical to NYSE
Amex, File No. 4-604 (May 25, 2010), available at http://www.sec.gov/rules/petitions/2010/petn4-604.pdf (the ``2010
Petition'').
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    The proposed rule change fits within another express exclusion to
the Commission's penny stock definition and would allow a company that
currently meets NYSE Amex's price requirement to instead list on the
Capital Market at the same initial listing price requirement.\11\
However, companies listing on the Capital Market under the proposed $2
or $3 price requirement would also have to satisfy the proposed net
tangible assets or revenue test,\12\ which is not a requirement of the
NYSE Amex rules, but which satisfies the requirements of Rule 3a51-
1(g).\13\ Specifically, as revised, a company would be eligible to list
on the Capital Market if it satisfies all existing listing standards
except for the $4 price requirement. Such a company must instead have a
minimum $3 price if it qualifies under the $5 million equity or
$750,000 net income alternatives \14\ or a minimum $2 price if it
qualifies under the $50 million market value of listed securities
alternative \15\. [sic] In addition, a company qualifying under the
proposed standard must have either: (a) Net tangible assets in excess
of $2 million, if the issuer has been in continuous operation for at
least three years; or (b) net tangible assets in excess of $5 million,
if the issuer has been in continuous operation for less than three
years; or (c) average revenue of at least $6 million for the last three
years. For this purpose, net tangible assets or revenue must be
demonstrated on the Company's most recently filed audited financial
statements, satisfying the requirements of the Commission, and which
are dated less than 15 months prior to the date of listing.\16\
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    \11\ All other requirements for listing on the Capital Market
are the same or higher than those of NYSE Amex. Nasdaq included a
table comparing its listing standards with NYSE Amex's as an
attachment to the 2010 Petition. In addition, the Commission
previously concluded that the initial listing standards for common
stock on the Capital Market were substantially similar to those of
NYSE Amex, allowing it to designate Capital Market securities as
``covered securities'' under Section 18 of the 1933 Act, 15 U.S.C.
77r(b). Securities Act Release No. 8791 (April 18, 2007), 72 FR
20410 (April 24, 2007).
    \12\ The net tangible asset or revenue requirements would not
apply to a company whose securities satisfy the existing $4 price
requirement.
    \13\ 17 CFR 240.3a51-1(g).
    \14\ Rules 5505(b)(1) or (b)(3).
    \15\ Rule 5505(b)(2).
    \16\ Nasdaq notes that under Rule 5210(a)(1), any newly listing
company, including a foreign private issuer, must be registered
under Section 12(b) of the Act, which requires filing audited
financial statements. Nasdaq believes that in all cases those
financial statements must be more recent than 15 months old. See
Rule 3-01 and 3-12, 17 CFR 210.3-01 and 210.3-12, with respect to
domestic companies, and Item 8.A(4) of Form 20-F, with respect to
foreign private issuers. However, the proposed rule adopts the 15
month requirement to assure consistency with the timing requirements
contained in Rule 3a51-1(g).
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    Unlike the relief Nasdaq requested in 2004 and 2010, the proposed
rule change will require companies to meet an additional net tangible
assets or revenue test, which NYSE Amex does not require, thus assuring
that securities listed under the proposed rule change would not be
considered ``penny stocks'' under the Act at the time of their listing.
In that regard, Rule 3a51-1 \17\ provides that ``penny stock'' means
any equity security other than securities that meet certain exclusions.
Rule 3a51-1(g) provides an exclusion for a security if its issuer has
either ``[n]et tangible assets (i.e., total assets less intangible
assets and liabilities) in excess of $2,000,000, if the issuer has been
in continuous operation for at least three years, or $5,000,000, if the
issuer has been in continuous operation for less than three years'' or
``[a]verage revenue of at least $6,000,000 for the last three years.''
When the Commission made changes to Rule 3a51-1 concerning exchange-
listed securities, it specifically noted that it did not intend to
foreclose reliance on the other exclusions available in Rule 3a51-1,
including the exclusion available in Rule 3a51-1(g).\18\ Proposed Rule
5505(a)(1)(B) would only permit a company to list with a $2 or $3 price
if it satisfies the net tangible assets or revenue test of Rule 3a51-
1(g) and, as such, securities listing under the proposed rule would not
be penny stocks at the time of their listing.\19\
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    \17\ 17 CFR 240.3a51-1.
    \18\ Release No. 49037, 69 FR at 2535 (text at footnote 41)
(``In addition, we note that any security that satisfies one of the
other exclusions in Rule 3a51-1 will not be a penny stock even if it
fails to satisfy any of the proposed conditions for reported
securities or for other exchange registered securities discussed
above.'').
    \19\ Furthermore, the Commission has already concluded that
companies that satisfy the NYSE Amex listing standards, including
price, are not penny stocks. There is no reason to draw a different
conclusion about these same companies if they were to list instead
on the Nasdaq Capital Market under the proposed standard. See Indep.
Petroleum Ass'n of Am. v. Babbitt, 92 F.3d 1248, 1258 (DC Cir. 1996)
(``An agency must treat similar cases in a similar manner unless it
can provide a legitimate reason for failing to do so.'').
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    A company that qualifies for initial listing only under the
proposed requirement could become a ``penny stock'' if it fails the net
tangible assets and revenue tests after listing and does not satisfy
any of the other exclusions from being a penny stock. In order to
assist brokers' and dealers' compliance with the requirements of the
Penny Stock Rules, Nasdaq will monitor companies listed under the
proposed alternative and publish a list of any company that initially
listed under that requirement, which does not then meet the
requirements of Rule 3a51-1(g), described above, or any of the other
exclusions from being a penny stock contained in Rule 3a51-1.\20\
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    \20\ Nasdaq believes that the other exclusion most likely to be
implicated would be Rule 3a51-1(d), 17 CFR 240.3a51-1(d), which
provides an exclusion from the definition of a penny stock for a
security with a minimum bid price of $5. Note, however, that if a
company obtains a $4 minimum bid price at a time when it meets all
other initial listing requirements, Nasdaq would no longer consider
the company as having listed under the proposed alternative
standard.

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    Nasdaq notes that the adoption of the proposed rule change should
not alter the Commission's prior designation of securities listed on
the Capital Market as ``covered securities'' under Section 18 of the
Securities Act of 1933.\21\ In 2007, the Commission concluded that
Capital Market securities were covered securities, exempt from State
law registration requirements, because the Capital Market has listing
standards that are substantially similar to the listing standards of
the Nasdaq Global Market, New York Stock Exchange, or NYSE Amex (the
``Named Markets'').\22\ The Commission has held that an exchange's
listing requirements will be considered substantially similar if the
listing standards are ``at least as comprehensive as those of the Named
Markets'' and that if ``listing standards are higher than the Named
Markets, then the Commission still determined that the petitioner's
listing standards are substantially similar to the Named Markets.''
\23\ As described above, following approval of the proposed rule
change, the Capital Market listing requirements for common stock will
continue to be the same as, or higher than, those of NYSE Amex, which
permit the listing of companies at $2 and $3 without the proposed
additional net tangible asset or revenue test. Indeed, all other
requirements for listing on the Capital Market meet or exceed the
requirements for listing on NYSE Amex. The proposed rule change,
therefore, should not disturb the Commission's designation of Capital
Market securities as covered securities.
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    \21\ 15 U.S.C. 77r.
    \22\ Securities Act Release No. 8791, supra.
    \23\ Id., 72 FR at 20411.
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2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\24\ in general and with
Sections 6(b)(5) and (8) of the Act,\25\ in particular. Section 6(b)(5)
requires, among other things, that a national securities exchange's
rules must be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, and, in
general, to protect investors and the public interest. The proposed
rule change would adopt a $2 and $3 initial listing price alternative
for the NASDAQ Capital Market that is substantially similar to the
requirements of NYSE Amex, which the Commission has already determined
is consistent with these requirements.\26\ However, the proposed rule
change would require companies to also satisfy an additional net
tangible asset or revenue test, which is not a requirement of the NYSE
Amex listing requirements and which is consistent with the requirements
for a security to avoid being a ``penny stock'' set forth in Rule 3a51-
1(g).\27\ Nasdaq believes that the proposed price requirement is
sufficient to protect investors and would exercise its discretionary
authority to deny initial listing if Nasdaq was concerned about the
ability of the company to maintain compliance with the continued
listing price or believed there were public interest concerns leading
to the company's low stock price.\28\ Moreover, given that these
companies have an exchange-listing available to them, prohibiting
listing on Nasdaq does not serve to protect investors and Nasdaq
believes that investors would be at least as well protected by having
these companies instead listed on the Capital Market, where they would
be subject to oversight by Nasdaq's regulatory staff.
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    \24\ 15 U.S.C. 78f.
    \25\ 15 U.S.C. 78f(b)(5) and (8).
    \26\ Securities Exchange Act Release No. 53050 (January 3,
2006), 71 FR 1580 (January 10, 2006) (approving the NYSE Amex $2
price requirement). The Commission notes that, prior to the adoption
of the $2 price requirement, the applicable NYSE Amex standard did
not require a minimum market price per share.
    \27\ 17 CFR 240.3a51-1(g).
    \28\ Nasdaq notes that NYSE Amex does not have a continued
listing price requirement, although NYSE Amex will ``consider
suspending dealings'' in a ``common stock selling for a substantial
period of time at a low price per share.'' NYSE Amex Company Guide
Section 1003(f)(v). As such, companies listing at $2 or $3 on NYSE
Amex could quickly fall to a very low price and nonetheless remain
listed indefinitely. On the other hand, Nasdaq requires a $1 price
for continued listing. Nasdaq Listing Rule 5550(a)(2). See also
Exchange Act Release No. 53050 (January 3, 2006), 71 FR 1580 at 1581
(note 11) (January 10, 2006) (encouraging NYSE Amex to adopt a
minimum price requirement for continued listing while approving SR-
AMEX-2005-114).
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    Section 6(b)(8) of the Act requires that the rules of an exchange
not impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. In addition, Section 11A of the
Act \29\ requires that there be fair competition among exchange markets
to further the public interest and protection of investors. The
Department of Justice recently noted the importance of a competitive
environment for exchange listings.\30\ Nasdaq believes that the
existing situation, whereby NYSE Amex is permitted to list companies
that no other market can, is an unfair burden on competition in
violation of Sections 6(b)(8) and 11A. Since 2008, NYSE Amex listed
approximately 50 companies for which no other market could compete. The
proposed rule change would enhance the competition between exchanges,
and benefit companies and their investors, by providing companies that
today are forced to list on NYSE Amex an alternative exchange listing
venue. As such, the proposed rule change is consistent with Sections
6(b)(8) and 11A.
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    \29\ 15 U.S.C. 78k-1.
    \30\ See ``NASDAQ OMX Group Inc. and IntercontinentalExchange
Inc. Abandon Their Proposed Acquisition of NYSE Euronext After
Justice Department Threatens Lawsuit'' (May 16, 2011), available at
http://www.justice.gov/atr/public/press_releases/2011/271214.htm.
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    Finally, as noted above, the proposed rule change would adopt the
identical initial listing price requirement contained in the NYSE Amex
Company Guide. As such, Nasdaq believes that its listing requirements
would remain substantially similar to those of NYSE Amex, as required
for covered securities under Section 18 of the Securities Act.\31\ In
addition, as noted, the proposed rule change would require that any
company qualifying under this new price alternative also meet the
requirements of Rule 3a51-1(g) \32\ and that these securities therefore
would not be considered ``penny stocks'' under the Act at the time of
their listing. To the extent that a company no longer qualified for the
exclusion under Rule 3a51-1(g), or any of the other exclusions in Rule
3a51-1, Nasdaq would notify the public by including the company in a
list published on Nasdaq's Web site.
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    \31\ 15 U.S.C. 77r.
    \32\ 17 CFR 240.3a51-1(g).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. Instead, the
proposed rule change would enhance the competition between exchanges,
and benefit companies and their investors, by allowing companies that
today are forced to list on NYSE Amex an alternative listing venue.

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

    Written comments were neither solicited nor received.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will: (a) By order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2012-002 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2012-002. 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 Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of Nasdaq. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2012-002 and should
be submitted on or before February 10, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
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    \33\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-1045 Filed 1-19-12; 8:45 am]
BILLING CODE 8011-01-P