The recent volatility on Wall Street manifested itself in two ways for companies: stock values plunged, but some listing fees increased. Effective January 1, annual fees for companies that list on Nasdaq increased from $75,000 to $95,000 (for companies with more than 150 million shares outstanding) and to $45,000 (from $39,600) for companies with 50 million to 75 million shares outstanding. Companies in between saw moderate fee increases, as did those with fewer than 50 million shares outstanding. At the rival NYSE, which is holding fees steady for now, the prices are higher, ranging from $46,500 to $139,000 and up.
One source suggested the fee increases are intended to help Nasdaq fund future acquisitions. Mary Dunbar, a board member at the National Investor Relations Institute, says that "private-equity investors and shareholder activism by hedge funds are driving consolidation, which translates into fewer issuer listings to be had." Nasdaq increased its fees to make up for the loss, says Dunbar. Nasdaq had no comment.
On the other hand, fees at the Securities and Exchange Commission are heading down. In mid-February, security registration costs dropped 71 percent, and securities and transaction fees fell 50 percent (such fees are priced per million dollars of stock sales transacted on the exchange). The SEC proposed the changes last year but needed congressional action to put them into effect.
Dunbar sees those cuts as a sort of Sarbox rebate program. "I believe this is an attempt by the SEC to do its bit to make U.S. markets more attractive and user-friendly," she says, "offsetting some of the heightened regulatory and disclosure requirements that have seemingly made our markets less competitive."