NASDAQ Adopts All-inclusive Annual Listing Fee | Practical Law

NASDAQ Adopts All-inclusive Annual Listing Fee | Practical Law

NASDAQ has adopted an all-inclusive annual fee for listed companies. Related rule amendments also raise the annual fees of companies that temporarily choose to remain on the existing fee schedule and make certain other clarifying changes.

NASDAQ Adopts All-inclusive Annual Listing Fee

Practical Law Legal Update 4-579-5686 (Approx. 4 pages)

NASDAQ Adopts All-inclusive Annual Listing Fee

by Practical Law Corporate & Securities
Published on 28 Aug 2014 • USA (National/Federal)
NASDAQ has adopted an all-inclusive annual fee for listed companies. Related rule amendments also raise the annual fees of companies that temporarily choose to remain on the existing fee schedule and make certain other clarifying changes.
On August 26, 2014, NASDAQ filed rule amendments that create an all-inclusive annual fee for listed companies. The new fee is intended to simplify billing and provide transparency on the annual cost of listing on NASDAQ. The amendments also raise the annual fees of companies that choose to remain temporarily on NASDAQ's existing fee schedule and make certain other clarifying changes.

Proposed All-inclusive Annual Fee

Companies subject to the all-inclusive annual fee must pay a single annual fee to NASDAQ that covers all the ordinary costs of listing for the year. Companies must pay separate fees for any:
  • Review of a delisting determination or public reprimand letter by an independent Hearings Panel or the NASDAQ Listing and Hearing Review Council.
  • Listing of new classes of securities.
The proposed fee schedule eliminates fees:
  • Related to the issuance of additional shares, record-keeping changes and substitution listing events.
  • For a written interpretation of NASDAQ's listing rules and for the review of a compliance plan by NASDAQ staff.
The amount of the all-inclusive annual fee varies based on which NASDAQ market a company is listed on and a company's total shares outstanding.
For companies listed on the NASDAQ Global Market or NASDAQ Global Select Market, the amount of the all-inclusive annual fee ranges from:
  • $45,000 to $155,000 for companies other than ADRs and closed-end funds.
  • $45,000 to $75,000 for ADRs.
For companies listed on the NASDAQ Capital Market, the amount of the all-inclusive annual fee ranges from:
  • $42,000 to $75,000 for companies other than ADRs and closed-end funds.
  • $37,000 to $45,000 for ADRs.
Currently-listed companies have the option to switch to the proposed annual fee for 2015 or to wait until 2018, when it becomes mandatory for all companies. However, NASDAQ is offering the following incentives to companies electing to switch to the all-inclusive annual fee for 2015:
  • A company will be billed for 2015, 2016 and 2017 based on the lower of:
    • its then-current total shares outstanding; or
    • the total shares outstanding reflected in information held by NASDAQ as of December 31, 2014.
    As a result, regardless of any increase in its shares outstanding during this period, the amount of a company's all-inclusive annual fee will not increase before January 1, 2018.
  • NASDAQ will forgive any fees owed to it for the listing of additional shares in the last reporting period of 2014, as a company ordinarily is not billed for this until it files its periodic report for that period in 2015.
All companies that list on NASDAQ after January 1, 2015 will be subject to the all-inclusive annual fee. However, NASDAQ will treat any company that applies to list on NASDAQ before January 1, 2015 similarly to a currently-listed company that elects to be subject to the all-inclusive fee for 2015 (its fee would not increase before January 1, 2018).

Fee Increase for Existing Fee Schedule

The proposal also raises the annual fees for companies that choose to remain on the existing fee schedule. Revised annual fees for most companies listed on the NASDAQ Global Market or NASDAQ Global Select Market will range from $40,000 to $125,000 based on total shares outstanding (compared with the current range of $35,000 to $99,500). Revised annual fees for most companies listed on the NASDAQ Capital Market will range from $32,000 to $45,000 based on total shares outstanding (compared with the current $32,000).

Additional Clarifying Changes

The proposal also makes clarifying changes to provisions regarding fees, including:
  • Clarifying how annual fees are assessed when a company first lists or transfers between market tiers.
  • Clarifying the application of fee waivers in certain merger situations.

Effectiveness

The changes become operative on January 1, 2015. Until then, NASDAQ will maintain the existing fee schedule in its online manual and will display the proposed changes as being effective in the future.
For more information on securities exchanges and how to select the proper exchange, see Practice Note, Selecting a US Securities Exchange.