NASDAQ Rule Change Gives Limited Annual Listing Fee Price Guarantee to Certain Companies That Switch to NASDAQ | Practical Law

NASDAQ Rule Change Gives Limited Annual Listing Fee Price Guarantee to Certain Companies That Switch to NASDAQ | Practical Law

NASDAQ issued an immediately effective rule change that gives a limited annual listing fee price guarantee to certain companies that switch to NASDAQ.

NASDAQ Rule Change Gives Limited Annual Listing Fee Price Guarantee to Certain Companies That Switch to NASDAQ

by Practical Law Corporate & Securities
Published on 26 Feb 2015 • USA (National/Federal)
NASDAQ issued an immediately effective rule change that gives a limited annual listing fee price guarantee to certain companies that switch to NASDAQ.
On February 25, 2015, NASDAQ issued an immediately effective rule change that is intended to incentivize certain companies to switch their listing to NASDAQ. The rule change provides a limited annual listing fee price guarantee to:
  • Companies that switch to NASDAQ from another national securities exchange.
  • Companies that:
    • are listed on both NASDAQ and the NYSE; and
    • cease to maintain their listing on the NYSE and instead transfer the listing of those securities to NASDAQ.
  • Unlisted companies that acquire a company listed on another national securities exchange and list on NASDAQ in connection with the transaction.
The rule change follows NASDAQ's recent adoption of an all-inclusive annual fee for listed companies, which applies to all companies that list on any of NASDAQ's three markets after January 1, 2015 (to learn more, see NASDAQ All-inclusive Annual Listing Fee: Chart).
Under the rule change, until January 1, 2018, qualifying companies that switch to NASDAQ will be charged an all-inclusive annual listing fee based on the lower of their shares outstanding as of the date of listing or at the time of billing. This means that the annual fee for these companies is guaranteed to not increase until at least January 1, 2018, regardless of any increase in shares outstanding. The rule change incentivizes companies to switch sooner than they might otherwise, before they issue more shares that could raise them to the next fee tier.
For more information on securities exchanges and how to select the proper exchange, see Practice Note, Selecting a US Securities Exchange.