NASDAQ Rule Change Allows Listed Companies to Opt in to NASDAQ's All-inclusive Annual Listing Fee | Practical Law

NASDAQ Rule Change Allows Listed Companies to Opt in to NASDAQ's All-inclusive Annual Listing Fee | Practical Law

NASDAQ filed an immediately effective rule change with the SEC that allows listed companies not currently subject to NASDAQ's all-inclusive annual listing fee to opt in to that fee program for 2016.

NASDAQ Rule Change Allows Listed Companies to Opt in to NASDAQ's All-inclusive Annual Listing Fee

by Practical Law Corporate & Securities
Published on 06 Aug 2015 • USA (National/Federal)
NASDAQ filed an immediately effective rule change with the SEC that allows listed companies not currently subject to NASDAQ's all-inclusive annual listing fee to opt in to that fee program for 2016.
On August 4, 2015, NASDAQ filed an immediately effective rule change with the SEC that allows listed companies not currently subject to NASDAQ's all-inclusive annual listing fee to opt in to that fee program for 2016. NASDAQ's all-inclusive annual listing fee, which took effect on January 1, 2015, is intended to cover all ordinary costs for the year, and it eliminates separate fees:
  • Related to the issuance of additional shares, record-keeping changes and substitution events.
  • For a written interpretation of NASDAQ's listing rules and for the review of a compliance plan by NASDAQ staff.
While the all-inclusive fee will become mandatory for all listed companies in 2018, listed companies were able to opt in to the all-inclusive fee program effective January 1, 2015 and were given incentives to do so (see Legal Update, NASDAQ Adopts All-inclusive Annual Listing Fee).
Under the new rule change, listed companies that did not opt in to the all-inclusive annual fee program in 2015 may do so until December 31, 2015, effective January 1, 2016. NASDAQ is offering the following incentives to companies electing to switch to the all-inclusive annual fee for 2016:
  • A company will not be billed for the listing of additional shares after it submits its opt-in form to NASDAQ, regardless of when the shares were issued.
  • A company will be billed for 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, 2015.
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.
The rule change also:
  • Clarifies that total shares outstanding includes the aggregate number of all securities outstanding for each class of listed equity securities.
  • Modifies the fee schedule for American Depositary Receipts (ADRs) and the description of how fees are assessed on a foreign private issuer (FPI) to clarify that the all-inclusive fee is based not just on "shares" but, like a domestic issuer, is based on the total of all of the FPI's listed equity securities, including ADRs and warrants.
To learn more about NASDAQ's all-inclusive annual listing fee, see NASDAQ All-inclusive Annual Listing Fee: Chart.
For more information on securities exchanges and how to select the proper exchange, see Practice Note, Selecting a US Securities Exchange.