Legal Bulletins

Nasdaq Stock Market Becomes A National Securities Exchange; Changes Market Designations

September 2006

Transformation into a National Securities Exchange
On August 1, 2006, The NASDAQ Stock Market became operational as a registered national securities exchange in NASDAQ-listed securities. It is now operating as an independent self-regulatory organization, separate from NASD. It plans to become operational as an exchange in other exchange-listed securities on October 1, 2006.

Prior to the transformation, NASDAQ-listed securities were either registered under Section 12(g) of the Securities Exchange Act of 1934 or exempt from registration. Securities that are listed on a national securities exchange, however, must be registered under Section 12(b) of the Exchange Act. In connection with its application to become a national exchange, NASDAQ asked the Securities and Exchange Commission to automatically register under Section 12(b) all listed securities that were registered under Section 12(g), and this request was granted. Thus, as a result of the transformation, registered NASDAQ-listed securities (both National Market and Small Cap) were automatically registered under Section 12(b) of the Exchange Act, and issuers of these securities are not required to take any further action. Issuers of listed securities that were exempt from registration will have to register those securities under Section 12(b) by August 1, 2009. The change in registration does not alter periodic reporting requirements, but future annual reports on Forms 10-K, 10-KSB, 20-F, and 40-F must now indicate that a non-exempt issuer’s NASDAQ-listed securities are registered under Section 12(b) of the Exchange Act and must also list “The NASDAQ Stock Market LLC” as the stock exchange on which its securities are listed. Listed issuers’ SEC file numbers and CIK numbers were not affected by the transformation.

Changes to NASDAQ Market Designations
Effective July 1, 2006, NASDAQ changed the name of the NASDAQ National Market to the NASDAQ Global Market and the name of the NASDAQ Small Cap Market to the NASDAQ Capital Market. NASDAQ also created a new market known as the NASDAQ Global Select Market with what NASDAQ believes are the highest listing standards in the world. NASDAQ has assigned approximately one-third of the qualified pre-change Global Market issuers (formerly National Market issuers) to the Global Select Market. Issuers that are now included in the NASDAQ Global Select Market will not owe additional listing fees as a result of being transferred from the NASDAQ Global Market.

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