September 24, 2014

Nasdaq’s Annual Listing Fees: Going Up

Here’s news from this blog by Gunster’s David Scileppi:

In late August, Nasdaq announced changes to their annual listing fees. Generally, the fees will increase effective January 1, 2015, but Nasdaq is also adopting an all-inclusive annual fee and eliminating its quarterly fees. The new annual fee will now include fees related to listing additional shares, record-keeping changes, and substitution listing events. The all-inclusive fee is optional for issuers until January 1, 2018 at which point it becomes mandatory. Issuers have a choice to make:

Option #1 – An issuer can do nothing and continue to pay an annual fee as well as pay the quarterly fees to list additional shares. Under this method, an issuer will experience increased 2015 fees ranging from 0% to 40% depending on how many shares an issuer has outstanding. Generally, the largest increases are for issuers with less than 10 million shares outstanding (14% increase) and for issuers with more than 100 million shares outstanding (40% if there are between 100 and 125 million shares outstanding and 25% if there are more than 150 million shares outstanding). Think of this option as the same as flying on an airplane. You get a seat (usually), but if you want anything else you need to pay.

Option #2 – Elect to pay an all-inclusive annual fee. Because the all-inclusive annual fee includes the ability to list additional shares during the year, this fee will be higher than the à la carte method. If an issuer wants to elect the all-inclusive method, then the issuer must complete the All-Inclusive Annual Listing Fee Opt-in Form electronically through the Nasdaq Listing Center anytime between now and December 31, 2014. To give issuers some incentive to choose this method, Nasdaq will not increase the listing fees on issuers (who elect to pay the all-inclusive fee) before January 1, 2018 (and its fee can decrease if the number of shares issued and outstanding decreases). This option is like flying on Southwest Airlines. Your ticket includes two checked bags for no extra fee. (But, then again, who checks two bags per person anymore?)

Companies that list on Nasdaq after January 1, 2015 will be required to pay the all-inclusive fee. Nasdaq has included a comparison of the fees to help you make a decision on its website.

The SEC’s 2014-2018 Five-Year Strategic Plan

Last week, the SEC released its 60-page strategic plan for the next five years – 2014 through 2018 – as required by the Government Performance and Results Act of 1993 (the last one was released in 2010). I’ve blogged before about how I dislike five-year horizons for any plan since unforeseen events often change priorities and needs.

A quick perusal of the strat plan doesn’t reveal anything earth-shattering. I think the SEC realizes that five-year horizons are foolish too as I don’t see much of anything beyond what we already expect to potentially come out of the agency. On page 9, it is artfully worded how Congress places limits on the SEC’s resources. The Corp Fin-related content mostly is on pages 37-39. The influence of the Investor Advisory Committee is felt in the strat plan – for example, on pages 20-21, there is discussion about “enhancing” the no-action letter process – and more accurately and promptly responding to informal guidance requests.

Chart: SEC Filing Fees – 2002-2015

It really has been a yo-yo. Thanks to David Westenberg of WilmerHale for providing this chart of the SEC’s filing fees over the years:

2015 – $116.20
2014 – $128.80
2013 – $136.40
2012 – $114.60
2011 – $116.10
2010 – $71.30
2009 – $55.80
2008 – $39.30
2007 – $30.70
2006 – $107.00
2005 – $117.70
2004 – $126.70
2003 – $80.90
2002 – $92.00

And don’t forget our new “SEC Filing Fees Handbook“…

– Broc Romanek