8-KMaterial AgreementsExhibits & Filings

NASDAQ, INC. 8-K Report, Material Agreement (Sep 9, 2005)

Filed September 9, 2005For Securities:NDAQ

Summary

This 8-K filing by The Nasdaq Stock Market, Inc. (NDAQ) details a significant agreement with the National Association of Securities Dealers, Inc. (NASD) concerning the OTC Bulletin Board (OTCBB). Effective October 1, 2005, Nasdaq will transfer operational responsibility for the OTCBB back to NASD. This move is a strategic decision driven by SEC concerns about Nasdaq operating the OTCBB following its registration as a national securities exchange. In exchange for transferring OTCBB assets, Nasdaq will receive substantial service fees from NASD for continuing to operate the OTCBB under an outsourced model for an initial two-year period, with potential for renewals. This agreement is expected to have a neutral impact on Nasdaq's overall operations. Investors should note that the transaction is contingent upon SEC approval.

Key Highlights

  • 1Nasdaq is transferring operational responsibility for the OTC Bulletin Board (OTCBB) back to the National Association of Securities Dealers (NASD).
  • 2The agreement addresses SEC concerns regarding Nasdaq operating the OTCBB after registering as a national securities exchange.
  • 3Nasdaq is selling all OTCBB-related assets to NASD.
  • 4NASD will outsource the operation of the OTCBB back to Nasdaq for an initial two-year period.
  • 5Nasdaq will receive service fees from NASD: $14.2 million in year one and $14.7 million in year two.
  • 6The transfer of the OTCBB is not expected to materially impact Nasdaq's operations.
  • 7The agreement is subject to SEC approval.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce a material definitive agreement between The Nasdaq Stock Market, Inc. and the National Association of Securities Dealers, Inc. (NASD) regarding the transfer of operational responsibility for the OTC Bulletin Board (OTCBB).

Nasdaq is transferring the OTCBB back to NASD to address concerns raised by the Securities and Exchange Commission (SEC) about Nasdaq continuing to operate the OTCBB after its registration as a national securities exchange.

Nasdaq will benefit financially by selling its OTCBB assets to NASD and then receiving service fees for continuing to operate the OTCBB under an outsourced agreement. These fees are $14.2 million for the first year and $14.7 million for the second year.

The transaction is contingent upon approval from the Securities and Exchange Commission (SEC). The transfer of the OTCBB is set to be effective October 1, 2005, assuming SEC approval.