December 12, 2006
Ladies and Gentlemen,
I am writing to you today to provide the views of the Issuer Advisory Group regarding listing fees on the respective stock exchanges and, specifically, the proposed increase in Nasdaq listing fees. I believe that we are uniquely qualified to offer our views in light of the fact that we are the only truly independent respondent to date. We have no business affiliation with any market participant other than issuers and offer our services to companies listed on all major exchanges.
Generally speaking, we would like to see reduced listing fees across all markets. However, the Nasdaq proposition goes beyond simply a fee increase. Rather, it addresses the issue of expanding their issuer services platform to foster increased inter-market competition.
The concept of an expanded service venue as a quid pro quo for increased fees is not new. We saw this in the mid-90's as Nasdaq substantially increased its fees to fund its marketing expansion, online services to issuers and various issuer driven initiatives that became the benchmark for all markets in terms of issuer services. These programs were highly successful and required its competitors to match them without a fee increase. The ultimate beneficiaries were issuers and their investors.
The markets are undergoing the most sweeping reforms in a generation. The overwhelming majority of these reforms have been driven by and serve to benefit the trading community. International and intra-market consolidation is underway. In such an environment, competition between markets for listings is vitally important. This is the key component in ensuring reasonable listing fees into the future. Indeed, we can envision the day when all markets achieve price parity at all listing size levels and at very modest fee levels. These are the real fruits of competition.
Notwithstanding the well-founded concerns of the various vendors and service providers, Nasdaq's expansion into this space is healthy for the marketplace. We are proponents of increased competition among the various markets. Hence, we respectfully recommend to the Commission that the fee increase be approved as it is likely to have this effect.
Kindest Regards,
Patrick J. Healy