Nasdaq Proposal to Register Securities on Behalf of Its Issuers; Your Views Requested by March 17th

©2006 Investment Company Institute. All rights reserved. Information may be abridged and therefore incomplete. Communications from the Institute do not constitute, and should not be considered a substitute for, legal advice. [19832] March 14, 2006 TO: CLOSED-END INVESTMENT COMPANY COMMITTEE No. 7-06 RE: Nasdaq Proposal to Register Securities on Behalf of Its Issuers; Your Views Requested by March 17th In connection with the recent approval of Nasdaq’s exchange application, the Securities and Exchange Commission has published for comment NASD Rule 4130. Rule 4130 would permit Nasdaq to file an application with the SEC on behalf of its issuers to register their securities under the Securities Exchange Act of 1934.1 The proposal is summarized below. Comments on the proposal are due to the Commission by March 23rd. If you have any comments on the proposal, please provide them to me no later than March 17th by phone 202.218- 3563, fax 202.326-5827, or email ddonohue@ici.org. When Nasdaq begins operation as a national securities exchange, securities listed on Nasdaq will need to be registered under Section 12(b) of the Exchange Act so that brokers and dealers may effect transactions in these securities on the Nasdaq Exchange. Absent the requested relief, Nasdaq’s operation as a national securities exchange would require approximately 3,200 Nasdaq issuers, including closed-end investment companies, to register their Nasdaq-listed securities under Section 12(b). To avoid individual issuers having to register their securities under Section 12(b), Nasdaq has proposed filing a single application for registration on behalf of all of its issuers. Nasdaq will allow any issuer that does not wish to register under Section 12(b) to opt-out of Nasdaq’s request to the Commission. Issuers that choose to opt out would be ineligible to have their securities listed and traded on the Nasdaq Exchange. Dorothy M. Donohue Associate Counsel 1 See SEC Release No. 34-53362 (February 24, 2006), 71 FR 10734 (March 2, 2006).