[Federal Register Volume 87, Number 11 (Tuesday, January 18, 2022)]
[Notices]
[Pages 2643-2647]
[FR Doc No: 2022-00752]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93950; File No. SR-NASDAQ-2021-107]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify Certain Exchange Traded Product Listing Fees

January 11, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 30, 2021, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to modify certain exchange traded product
listing fees. While changes proposed herein are effective upon filing,
the Exchange has designated the proposed amendments to be operative on
January 1, 2022.
    The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, at
the principal office of the Exchange, and at the Commission's Public
Reference Room.

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the

places specified in Item IV below. The Exchange has prepared summaries,
set forth in sections A, B, and C below, of the most significant
aspects of such statements.

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

1. Purpose
    The purpose of the proposed rule change is to modify certain of the
Exchange's listing fees for exchange traded products (``ETPs'') covered
by Listing Rules 5930 and 5940, as well as to modify the Preamble to
Company Listing Fees in Listing Rule 5901.
    Currently, Listing Rule 5930 addresses listing fees for Linked
Securities, SEEDS, and Other Securities. The proposed rule change
relocates the references to the fees for Linked Securities from Listing
Rule 5930 (Linked Securities, SEEDS, and Other Securities) to Listing
Rule 5940 (Exchange Traded Products) such that Linked Securities will
no longer be subject to the fees in Listing Rule 5930 and will instead
be subject to the fees in Listing Rule 5940. The modified fees for
Linked Securities will mirror the fees for many of the ETPs that are
covered by Listing Rule 5940, which are detailed herein. For
consistency and clarification, all references to Linked Securities and
related Rule 5710 cites are also being deleted from the Preamble to
Company Listing Fees in Listing Rule 5901. Also, a clarification is
being made in the Preamble of changing the term ``Exchange Listed
Products'' to ``Exchange Traded Products'' for consistency and
clarification. Additionally, a typographical error in the heading of
Listing Rule 5930(b) is proposed to be corrected by changing
``Lisitng'' to ``Listing'' for clarification.
    The introduction to Listing Rule 5940 is being expanded for the
sake of clarification to say that the securities covered by this rule
includes not only Portfolio Depository Receipts, Index Fund Shares,
Managed Fund Shares, and NextShares, but also includes Exchange Traded
Fund Shares, Commodity-Based Trust Shares, Currency Trust Shares,
Commodity Index Trust Shares, Commodity Futures Trust Shares,
Partnership Units, Trust Units, Managed Trust Shares \3\ and Linked
Securities.\4\
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    \3\ Exchange Traded Fund Shares, Commodity-Based Trust Shares,
Currency Trust Shares, Commodity Index Trust Shares, Commodity
Futures Trust Shares, Partnership Units, Trust Units, and Managed
Trust Shares are already subject to the fees in Listing Rule
5940(a)(1) and this change is simply being made to increase the
clarity of the rule.
    \4\ Per existing Listing Rule 5940 the fees in Listing Rule 5940
will also apply to securities listed under the Rule 5700 Series
where no other fee schedule is specifically applicable and that
provision of the rule is not being modified.
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    The Entry Fee under Listing Rule 5940(a)(1) is being modified to
include all of the securities listed above,\5\ with the exception of
NextShares (which are subject to the Entry Fee in Listing Rule
5940(a)(2)) and to eliminate the listing fee of $5,000, which currently
includes a $1,000 non-refundable application fee. Both the elimination
of the listing and application fees reflect that the market for listing
ETPs is extremely competitive and ETPs may freely choose alternative
listing venues. The Exchange has determined that these proposed fee
changes, coupled with the fee changes discussed below, will positively
impact the competition in the ETP listing space.
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    \5\ This includes securities listed under the Rule 5700 Series
where no other fee schedule is specifically applicable.
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    The All-Inclusive Annual Listing Fee under Listing Rule 5940(b) is
being modified. First, the list of securities in Listing Rule
5940(b)(1) will be expanded to not only include, in addition to any
other security under the Rule 5700 Series where no other fee schedule
is specifically applicable listed on The Nasdaq Global Market,
Portfolio Depository Receipts, Index Fund Shares, and Managed Fund
Shares, but also Exchange Traded Fund Shares, Commodity-Based Trust
Shares, Currency Trust Shares, Commodity Index Trust Shares, Commodity
Futures Trust Shares, Partnership Units, Trust Units, Managed Trust
Shares \6\ and Linked Securities.
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    \6\ Exchange Traded Fund Shares, Commodity-Based Trust Shares,
Currency Trust Shares, Commodity Index Trust Shares, Commodity
Futures Trust Shares, Partnership Units, Trust Units, and Managed
Trust Shares are already subject to the fees in Listing Rule
5940(b)(1) and this change is simply being made to increase the
clarity of the rule.
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    Second, the current fee schedule that is calculated on total shares
outstanding that ranges from up to 1 million shares to 250+ million
shares with fees that range from $6,000 to $50,000 is being replaced by
a single fee of $4,000 per product.\7\ Nasdaq is simplifying the fee
structure (and related rule language) of the All-Inclusive Annual
Listing Fee under Listing Rule 5940(b) to create a single fee that the
Exchange believes is more reasonable and equitable because the proposed
per product fee structure will be the same for all products regardless
of the product's total shares outstanding. Assessing the fee on a per
product basis rather than on total shares outstanding, the Exchange
believes more accurately reflects the level of support required. The
level of support the Exchange provides does not increase significantly
as the ETP's shares outstanding grows. It is more closely correlated to
the number of ETPs listed and thus warrants a separate fee per product.
This means that an issuer with more ETPs listed on Nasdaq will have a
higher total annual listing fee under the proposed changes than an
issuer with fewer ETPs listed on Nasdaq even if the issuer with fewer
ETPs has more total shares outstanding.
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    \7\ For the avoidance of doubt, in this filing $4,000 per
product means $4,000 for each symbol listed on the Exchange.
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    Listing Rule 5940(b)(3) is being eliminated because the new fee
structure of Listing Rule 5940(b) renders it irrelevant.
    Listing Rule 5940(b)(5) is being renumbered as Listing Rule
5940(b)(8) and will otherwise remain unchanged and still say that
except as otherwise set forth in Rule 5940(b), the All-Inclusive Annual
Listing Fee described will be assessed as described in Rule 5910(b)(3).
Proposed Listing Rule 5940(b)(5) says that in the first calendar year
of listing, a product's All-Inclusive Annual Listing Fee will be
prorated based on the number of months listed. Proposed Listing Rule
5940(b)(5) and Rule 5910(b)(3)(A), both say that in the first calendar
year of listing, a product's or Company's All-Inclusive Annual Listing
Fee, respectively, will be prorated based on the number of months
listed. The difference, as discussed above, is that proposed Listing
Rule 5940(b)(5) will look to prorate the single fee of $4,000 per
product while current Rule 5910(b)(3)(A) is based on the total shares
outstanding as of the date of the Company's listing. This proposed
change is made for clarity and consistency with the All-Inclusive
Annual Listing Fee change described above.
    Proposed Listing Rule 5940(b)(6) is being added to modify how
listing ETP transfers from another national securities exchange to
Nasdaq will be handled regarding the All-Inclusive Annual Listing Fee.
Current Listing Rule 5940(b)(5) says that except as otherwise set forth
in Rule 5940(b), the All-Inclusive Annual Listing Fee described will be
assessed as described in Rule 5910(b)(3). Proposed Listing Rule
5940(b)(6) says that for the year in which a product listing transfers
to

Nasdaq, as well as for the first full calendar year of its listing, a
product will not be charged the All-Inclusive Annual Listing Fee.
Currently, for the year in which a Company transfers its listing to
Nasdaq, it will not be charged the All-Inclusive Annual Listing Fee.\8\
Nasdaq believes that modifying the fee waiver to extend the first full
calendar year following a product's listing will further incentivize
issuers to transfer ETPs to Nasdaq and, thereby, promote greater
competition among ETP listing exchanges, which will be to the benefit
of issuers, ETPs, and ETP investors.
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    \8\ See IM-5900-4.
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    Proposed Listing Rule 5940(b)(7) is being added to say that
liquidations will be refunded a portion of the All-Inclusive Annual
Listing Fee on a prorated basis based on the number of months listed
during the calendar year of liquidation. Currently Nasdaq does not
provide for such liquidation refunds. The Exchange is proposing this
change as another way to make its fee schedule more competitive with
the other exchanges, who also provide for refunds on a prorated
basis.\9\
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    \9\ See e.g., NYSE Arca Equities: Listing Fees as of June 30,
2021, footnote 8 (``The Annual Fees applicable to Exchange Traded
Products that have liquidated and as a result are delisted from the
Exchange will be prorated for the portion of the calendar year that
such issue was listed on the Exchange, based on days listed that
calendar year, and refunded.''). https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Listing_Fee_Schedule.pdf.
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    As described below, Nasdaq proposes to make the aforementioned fee
changes to better reflect the Exchange's costs related to listing ETPs
and would promote competition for ETP listings.
    While these changes are effective upon filing, Nasdaq has
designated the proposed amendments to be operative on January 1, 2022.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\11\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4) and (5).
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    Nasdaq believes that it is not unfairly discriminatory and
represents an equitable allocation of reasonable fees to amend Listing
Rules 5901, 5930 and 5940 to modify the listing fees for Linked
Securities, to eliminate the Entry and Application Fees for certain
ETPs, as well as to modify the All-Inclusive Annual Listing Fee for
certain ETPs.
    Specifically, the Exchange believes that modifying the fees and
relocating references to Linked Securities from Listing Rule 5930 to
Listing Rule 5940 is not unfairly discriminatory and represents an
equitable allocation of reasonable fees since it aligns the fees for
Linked Securities with the proposed fees for a broad range of ETPs
discussed above, which the Exchange believes are more similar to Linked
Securities than its existing location within Listing Rule 5930 that
includes SEEDS and Other Securities. This also includes the proposed
changes to the Preamble to Company Listing Fees in Listing Rule 5901
and references to Linked Securities and related Rule 5710 cites
throughout Listing Rule 5930, as well as a clarification being made in
the Preamble of changing the term ``Exchange Listed Products'' to
``Exchange Traded Products'' for consistency and clarification and to
the benefit of market participants. Additionally, a typographical error
in the heading of Listing Rule 5930(b) is proposed to be corrected by
changing ``Lisitng'' to ``Listing'' for clarification and to the
benefit of market participants.
    Nasdaq believes that it is not unfairly discriminatory and
represents an equitable allocation of reasonable fees to amend Listing
Rule 5940 to eliminate the Entry and Application Fees for the specified
ETPs, as well as to modify the All-Inclusive Annual Listing Fee for the
specified ETPs. Nasdaq believes these changes promote competition for
the listing of ETPs. Additionally, Nasdaq also believes these changes
are not unfairly discriminatory and represent an equitable allocation
of reasonable fees because following the adoption of SEC Rule 6c-11
\12\ the majority of ETPs are now listed under the generic listing
standards of Nasdaq Rule 5704 (Exchange Traded Fund Shares) and thus no
longer require as much in the way of both legal and business resources
during the initial application process. Moreover, the Exchange believes
that the proposed $4,000 flat fee per product rather than the current
fee based on the total shares outstanding, more accurately reflects and
is more closely correlated to the level of Exchange support required,
and that the level of support Nasdaq provides does not increase
significantly as the ETP's shares outstanding grows. This means that an
issuer with more ETPs listed on Nasdaq will have a higher total annual
listing fee under the proposed changes than an issuer with fewer ETPs
listed on Nasdaq even if the issuer with fewer ETPs has more total
shares outstanding.
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    \12\ See 17 CFR 270.6c-11.
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    Specifically, the Exchange believes that amending the All-Inclusive
Annual Listing Fee under Listing Rule 5940(b)(1) (and related rule
language) from the current fee schedule that is calculated on total
shares outstanding that ranges from up to 1 million shares to 250+
million shares with fees that range from $6,000 to $50,000 to being
replaced by a single fee of $4,000 per product is not unfairly
discriminatory and represents an equitable allocation of reasonable
fees because it simplifies the fee schedule and promotes greater
competition with the other exchange listing venues. Also, a single fee
per product creates a fee schedule that is more reasonable and
equitable for products and issuers of all sizes for these ETPs with
issuers gaining certainty as the number of their ETPs grow. The total
annual listing fee for an issuer increases as the number of ETPs that
an issuer has on Nasdaq grows, and the necessary support for the
additional listings increases as well. In accordance with these
proposed changes, Listing Rule 5940(b)(3) will be eliminated because
the new fee structure of the rule renders it irrelevant and
unnecessary, and its elimination will be to the benefit of market
participants.
    The Exchange also believes it is not unfairly discriminatory and
represents an equitable allocation of reasonable fees to amend the
introduction to Listing Rule 5940 to say that the securities covered by
this rule includes not only Portfolio Depository Receipts, Index Fund
Shares, Managed Fund Shares, and NextShares, but also includes Exchange
Traded Fund Shares, Commodity-Based Trust Shares, Currency Trust
Shares, Commodity Index Trust Shares, Commodity Futures Trust Shares,
Partnership Units, Trust Units and Managed Trust Shares \13\ because it
clarifies that these additional ETPs are already subject to the fees in
this rule and that this change is simply being made to increase the
clarity of the rule.
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    \13\ See supra note 4.
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    Additionally, Nasdaq believes it is not unfairly discriminatory and
represents an equitable allocation of reasonable fees to amend Listing
Rule 5940(a)(1) and (b)(1) to include Exchange Traded Fund Shares,
Commodity-Based Trust Shares, Currency Trust Shares, Commodity Index
Trust Shares, Commodity Futures Trust Shares, Partnership Units, Trust
Units, and Managed Trust Shares because it clarifies that these
additional ETPs are

already subject to the fees in Listing Rule 5940(a)(1) and (b)(1) and
that this change is simply being made to increase the clarity of the
rule.
    The Exchange also believes it is not unfairly discriminatory and
represents an equitable allocation of reasonable fees to add proposed
Listing Rule 5940(b)(5) to clarify that in the first calendar year of
listing, a product's All-Inclusive Annual Listing Fee will be prorated
based on the number of months listed. Current Listing Rule 5940(b)(5)
says that except as otherwise set forth in Rule 5940(b), the All-
Inclusive Annual Listing Fee described will be assessed as described in
Rule 5910(b)(3)--specifically it is covered by Rule 5910(b)(3)(A).
Proposed Listing Rule 5940(b)(5) and Rule 5910(b)(3)(A) both say that
in the first calendar year of listing, a product's or Company's All-
Inclusive Annual Listing Fee, respectively, will be prorated based on
the number of months listed. The difference, as discussed above, is
that proposed Listing Rule 5940(b)(5) will look to prorate the single
fee of $4,000 per product while current Rule 5910(b)(3)(A) is based on
the total shares outstanding as of the date of the Company's listing.
As a result of the proposed changes, current Listing Rule 5940(b)(5) is
being renumbered as Listing Rule 5940(b)(8).
    Nasdaq believes it is not unfairly discriminatory and represents an
equitable allocation of reasonable fees to add proposed Listing Rule
5940(b)(6) to modify how listing transfers from another national
securities exchange to Nasdaq will be handled regarding the All-
Inclusive Annual Listing Fee. Currently, Listing Rule 5940(b)(5) says
that except as otherwise set forth in Rule 5940(b), the All-Inclusive
Annual Listing Fee described will be assessed as described in Rule
5910(b)(3). Proposed Listing Rule 5940(b)(6) says that for the year in
which a product listing transfers to Nasdaq, as well as for the first
full calendar year of its listing, a product will not be charged the
All-Inclusive Annual Listing Fee. Nasdaq believes this proposed rule
change is not unfairly discriminatory and represents an equitable
allocation of reasonable fees and will further incentivize issuers to
transfer ETPs to Nasdaq and promote greater competition among the ETP
listing exchanges, which will be to the benefit of issuers, ETPs, and
ETP investors.
    Additionally, Nasdaq believes it is not unfairly discriminatory and
represents an equitable allocation of reasonable fees to add proposed
Listing Rule 5940(b)(7) to provide that liquidations will be refunded a
portion of the All-Inclusive Annual Listing Fee on a prorated basis
based on the number of months listed during the calendar year of
liquidation. Currently the Exchange does not provide for such
liquidation refunds. The Exchange is proposing this change as another
way to make its fee schedule more competitive with the other exchanges,
who also provide for refunds on a prorated basis.\14\
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    \14\ See supra footnote 9.
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    Finally, Nasdaq notes that it operates in a highly competitive
market in which market participants can readily switch exchanges if
they deem the listing fees excessive. In such an environment, Nasdaq
must continually review its fees to assure that they remain
competitive.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act, as amended. The market for
listing ETPs is extremely competitive and ETPs may freely choose
alternative listing venues. Nasdaq must continually review its fees to
assure that they remain competitive. Also, a single $4,000 fee per
product creates a fee schedule that is more reasonable and equitable
for products and issuers of all sizes for these ETPs with issuers
gaining certainty as to listing fees as the number of their ETPs grow.
For these reasons, Nasdaq does not believe that the proposed rule
change will result in any burden on competition for ETP listings.

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

    No written comments were either solicited or received.

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

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-NASDAQ-2021-107 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-2021-107. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of 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-2021-107 and should be submitted
on or before February 8, 2022.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-00752 Filed 1-14-22; 8:45 am]
BILLING CODE 8011-01-P