FR 2020-29221

In a proposed rule change, The Nasdaq Stock Market LLC aims to waive certain fees for listing non-convertible bonds, specifically when these bonds are voluntarily delisted from a regulated foreign exchange and subsequently listed on Nasdaq. This waiver seeks to ease the financial burden of paying fees to multiple exchanges, potentially making Nasdaq a more attractive option for listing bonds. Proponents argue this proposal aligns with similar practices on other exchanges and ensures competitive equity.

Summary of the Document

The document is a notice from the Securities and Exchange Commission (SEC) regarding Nasdaq's proposal to modify its fee structure for certain bond listings. Specifically, Nasdaq intends to waive the application and annual fees for non-convertible bonds that are delisted from foreign exchanges before being listed on Nasdaq. The proposal is framed as a means to improve market competitiveness by reducing the financial disincentive for companies that might consider listing their bonds on Nasdaq.

Significant Issues or Concerns

Several concerns arise from this proposal. Firstly, the selective waiver of fees might appear to favor companies transitioning from foreign exchanges over those not making such transfers, potentially raising issues of fairness. This could draw criticism regarding preferential treatment.

Another concern is the rationale that less work is required for processing listings transferred from other exchanges. This claim lacks supporting data or metrics, which could question the transparency and efficiency of the process.

Moreover, the proposal, as articulated, leverages technical language that could be difficult for those not versed in securities regulation to understand. This complexity might reduce the accessibility and transparency of the rule change to the general public.

There is also a notable absence of detailed analysis on the potential cost savings for issuers from this waiver. This lack of financial impact data may be perceived as a transparency issue, with stakeholders unsure about the fiscal implications.

Impact on the Public

The proposed change could have varied impacts on the public. For investors, the potential increase in listings on Nasdaq could expand investment opportunities in non-convertible bonds. However, if the proposal inadvertently favors some issuers over others, it might raise fairness concerns among market participants. Enhanced competition from Nasdaq could potentially result in better services and fee structures across the board, benefiting investors indirectly.

Impact on Specific Stakeholders

For issuers of non-convertible bonds, especially those listed on foreign exchanges, the waiver offers direct financial relief. By reducing duplicative fees, the proposal lowers costs associated with transferring bond listings to Nasdaq, which might encourage more issuers to consider Nasdaq as a viable listing venue.

Conversely, for stakeholders concerned with regulatory equity, this proposal might seem to undermine the principle of a level playing field, favoring issuers changing listing venues over those who have already incurred initial listing costs on Nasdaq.

In summation, while the proposed fee waiver could enhance Nasdaq’s attractiveness and competitive stance in the bond market, it raises questions about equity, transparency, and the holistic impact on the financial ecosystem.