Nasdaq recently announced an opportunity that allows companies listed on Nasdaq to pay a higher annual listing fee in order to avoid paying most other fees. Whether this is likely to benefit a particular company is worth analysis.
Nasdaq-listed companies currently pay a “standard” annual listing fee that varies depending upon the total shares outstanding (from $40,000 for companies with not more than 50 million shares outstanding to a maximum of $125,000), plus additional fees whenever additional shares are issued and whenever certain other corporate actions occur (like a name change, reverse stock split, trading symbol change or when submitting a compliance program to Nasdaq).
Nasdaq recently announced its new All-Inclusive Annual Listing Fee Program that will apply to all Nasdaq-listed companies beginning in January 2018. It also announced an “opt-in” opportunity that allows companies to become subject to the new listing fee structure early, thereby potentially realizing overall savings on total fees due after the opt-in.
The new structure eliminates fees for listing additional shares, record-keeping fees and substitution listing event fees, as well as fees for written interpretation of the listing rules and for Nasdaq review of a compliance plan.
To encourage companies to switch to the All-Inclusive Annual Listing Fee Program for 2015, companies that opt-in to the new fee structure by December 31, 2014 also receive:
- A “lock-in” on the annual listing fee until January 1, 2018, regardless of increases in the company’s outstanding shares before that date; and
- “Forgiveness” of any listing fees that had not yet been billed when the “opt-in” is filed with respect to the issuance of additional shares. This can benefit a company that issued, or plans to issue, additional shares in late 2014 that would otherwise trigger additional listing fees.
Whether an early opt-in would benefit a particular Nasdaq company depends upon the aggregate actual or foreseeable fees due to Nasdaq under the existing fee structure compared with fees due under the new structure. See “Annual Fees” in the Nasdaq Continued Listing Guide, the Company listing fees in the NASDAQ Stock Market Rules (Rules 5900 to 5950 and related interpretations), and the Frequently Asked Questions regarding the All-Inclusive Listing Fee program.