[Federal Register Volume 75, Number 122 (Friday, June 25, 2010)]
[Notices]
[Pages 36460-36461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-15361]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62326; File No. SR-NASDAQ-2010-068]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Proposed Rule Change To Establish a Revenue Sharing
Program With Correlix, Inc.
June 18, 2010.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and rule 19b-4 thereunder,\2\ notice is hereby given that
on June 8, 2010, The NASDAQ Stock Market LLC (the ``Exchange'' or
``NASDAQ'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
NASDAQ is filing with the Securities and Exchange Commission
(``SEC'' or ``Commission'') a proposed rule change to establish a
revenue sharing program with Correlix, Inc. (``Correlix''). The text of
the proposed rule change is available at http://nasdaq.cchwallstreet.com, at the Exchange's principal office, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
NASDAQ is filing a proposed rule change to establish a revenue
sharing program with Correlix.\3\ NASDAQ has entered into an agreement
with Correlix to provide to users of the NASDAQ Market Center real-time
analytical tools to measure the latency of orders to and from that
System. Under the agreement, NASDAQ will receive 30% of the total
monthly subscription fees received by Correlix from parties who have
contracted directly with Correlix to use their RaceTeam latency
measurement service for the NASDAQ Market Center. NASDAQ will not bill
or contract with any Correlix RaceTeam customer directly.
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\3\ If approved, this program shall commence upon termination of
the free 60-day trial period for Correlix servives [sic] proposed in
SR-NASDAQ-2009-069 [sic].
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Pricing for the Correlix RaceTeam product for the NASDAQ market
varies depending on the number of unique MPIDs and ports selected by
the customer for monitoring by Correlix. For NASDAQ (including the
NASDAQ Options Market), the fee will be an initial $3,000 monthly base
fee for the first unique MPID monitored. For each additional unique
MIPD [sic] sought to be monitored, an additional monthly charge of
$1,000 will be assessed. The monthly price for each unique MPID
includes the monitoring of up to 25 NASDAQ port connections associated
with that particular MPID. Customers that wish to exceed 25 ports per-
MPID for monitoring can purchase additional 25 port blocks for an
additional fee of $1000 per month per MPID.
Under the program, Correlix will see an individualized unique
NASDAQ-generated identifier that will allow Correlix RaceTeam to
determine round trip order time,\4\ from the time the order reaches the
NASDAQ extranet, through the NASDAQ matching engine, and back out of
the NASDAQ extranet. The RaceTeam product offering does not measure
latency outside of the NASDAQ extranet. The unique identifier serves as
a technological information barrier so that the RaceTeam data collector
will only be able to view data for Correlix RaceTeam subscriber firms
related to latency. Correlix will not see subscriber's individual order
detail such as security, price or size. Individual RaceTeam
subscribers' logins will restrict access to only their own latency
data. Correlix will see no specific information regarding the trading
activity of non-subscribers.
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\4\ The product measures latency of orders whether the orders
are rejected, executed, or partially executed.
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NASDAQ believes that above arrangement will provide users of the
NASDAQ Market Center greater transparency into the processing of their
trading activity and allow them to make more efficient trading
decisions.
2. Statutory Basis
NASDAQ believes that the proposed rule change is consistent with
the provisions of section 6 of the Act,\5\ in general, and with
sections 6(b)(5) of the Act,\6\ in particular, in that the proposal is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. In
particular, the proposal will provide greater transparency into trade
and information processing and thus allow market participants to make
better-informed and more efficient trading decisions.
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\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(b)(5).
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In addition, NASDAQ believes that the proposed rule change is
consistent with the provisions of section 6 of the Act,\7\ in general,
and with section 6(b)(4) of the Act,\8\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility or system which NASDAQ operates or controls. In particular,
NASDAQ notes that it operates in a highly competitive market in which
market participants can readily direct orders to competing venues and
that use of the Correlix RaceTeam product is completely voluntary.
Further, NASDAQ makes the RaceTeam product uniformly available pursuant
to a standard non-discriminatory pricing schedule offered by Correlix.
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\7\ 15 U.S.C. 78f.
\8\ 15 U.S.C. 78f(b)(4).
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[[Page 36461]]
B. Self-Regulatory Organization's Statement on Burden on Competition
NASDAQ does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, is consistent with the Act. Comments may be
submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-NASDAQ-2010-068 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2010-068. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Room, 100 F
Street, NE., Washington, DC 20549, on official business days between
the hours of 10 a.m. and 3 p.m. Copies of such filing also will be
available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NASDAQ-2010-068 and should be submitted on or before July 16, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-15361 Filed 6-24-10; 8:45 am]
BILLING CODE 8010-01-P