04-6105. Self-Regulatory Organizations; Order Granting Approval to Proposed Rule Change by the National Association of Securities Dealers, Inc. Relating to Listing Fee Waivers

March 11, 2004.

On December 29, 2003, the National Association of Securities Dealers, Inc. (“NASD” or “Association”), through its subsidiary, the Nasdaq Stock Market, Inc. (“Nasdaq”), 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 relating to retroactive listing fee waivers. Specifically, the proposal would allow a Nasdaq issuer that completed a merger with another Nasdaq issuer during the first 90 days of 2003 to apply for and receive a waiver for 75% of the annual fees assessed to the acquired Nasdaq issuer.^[3] The proposed rule change was published for comment in the Federal Register on February 5, 2004.^[4] The Commission received no comments on the proposal.

The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities association ^[5] and, in particular, the requirements of section 15A of the Act ^[6] and the rules and regulations thereunder. The Commission finds specifically that the proposal is consistent with the requirements of section 15A(b)(5) of the Act,^[7] because it provides for the equitable allocation of reasonable dues, fees, and other charges among members and issuers and other persons using any facility or system that NASD operates or controls. Nasdaq has represented that it is proposing to take this action because it believes that is equitable to provide a partial credit for annual listing fees in order to avoid the assessment of two fees where a merger has occurred within the first 90 days of a given billing year. Further, Nasdaq has already implemented the same fee waiver on a going-forward basis.^[8] The Commission believes that the proposed fee waiver should assist in reducing costs incurred by Nasdaq issuers that completed a merger with another Nasdaq issuer during the first 90 days of 2003.

It is therefore ordered, pursuant to section 19(b)(2) of the Act ^[9] , that the proposed rule change (File No. SR-NASD-2003-199) be, and hereby is, approved.

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.^[10]

Margaret H. McFarland,

Deputy Secretary.

Footnotes

1.  15 U.S.C. 78s(b)(1).

2.  17 CFR 240.19b-4.

3.  The Commission notes that Nasdaq also submitted a separate proposed rule change, pursuant to section 19b(3)(A) of the Act, 15 U.S.C. 78s(b)(3)(A), to apply the same listing fee waiver on a going-forward basis. See Securities Exchange Act Release No. 49133 (January 28, 2004), 69 FR 5630 (February 5, 2004) (File No. SR-NASD-2003-198).

4.  See Securities Exchange Act Release No. 49134 (January 28, 2004), 69 FR 5631.

5.  In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

6.  15 U.S.C. 78 o-3.

7.  15 U.S.C. 78 o-3(b)(5).

8.  See supra note 3.

9.  15 U.S.C. 78s(b)(2).

10.  17 CFR 200.30-3(a)(12).