[Federal Register Volume 75, Number 126 (Thursday, July 1, 2010)]
[Notices]
[Pages 38162-38163]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-15997]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62380; File No. SR-NASDAQ-2010-052]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Approving Proposed Rule Change To Establish the Nasdaq Short Sale
Volume and Monthly Short Sale Transaction Service and Related Fees
June 25, 2010.
I. Introduction
On April 26, 2010, The NASDAQ Stock Market LLC (``Nasdaq'') filed
with the Securities and Exchange Commission (``Commission''), pursuant
to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'')
\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to establish
the Nasdaq Short Sale Volume and Monthly Short Sale Transaction files
(the ``Service''). The Service is comprised of aggregate reported share
volume of executed short sale trades during regular market hours on a
daily basis, as well as every short sale executed on the Nasdaq
execution system and reported to a consolidated tape for Nasdaq, the
New York Stock Exchange (``NYSE'') and regional exchange-listed
securities, including the price of the trade and the number of shares
for every short sale transaction, on a monthly basis, separated into
daily files. On May 13, 2010, Nasdaq filed Amendment No. 1. The
proposed rule change, as modified by Amendment No. 1, was published for
comment in the Federal Register on May 25, 2010.\3\ The Commission
received no comments on the proposal. This order approves the proposed
rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 62112 (May 14,
2010), 75 FR 29371.
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II. Description of the Proposal
Nasdaq is proposing to establish a new service and related fees.
The Service is comprised of aggregate reported share volume of executed
short sale trades during regular market hours on a daily basis, as well
as every short sale executed on the Nasdaq execution system and
reported to a consolidated tape for Nasdaq, the NYSE and regional
exchange-listed securities, including the price of the trade and the
number of shares for every short sale transaction, on a monthly basis,
separated into daily files. Nasdaq proposes to offer the Service at
$500 per subscriber, per month, which would allow a distributor access
to the downloadable FTP files and to distribute the product internally
and externally.
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 1, is consistent with the Act and
the rules and regulations thereunder applicable to a national
securities exchange.\4\ In particular, the Commission finds that the
proposed rule change is consistent with Section 6(b)(4) of the Act,\5\
which requires that the rules of a national securities exchange provide
for the equitable allocation of reasonable dues, fees, and other
charges among its members and issuers and other parties using its
facilities, and Section 6(b)(5) of the Act,\6\ which requires, among
other things, that the rules of an exchange not be designed to permit
unfair discrimination between customers, issuers, brokers, or dealers.
The Commission also finds that the proposed rule change is consistent
with Section 6(b)(8) of the Act,\7\ in that it does not impose any
burden on
[[Page 38163]]
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.\8\
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\4\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\5\ 15 U.S.C. 78f(b)(4).
\6\ 15 U.S.C. 78f(b)(5).
\7\ 15 U.S.C. 78f(b)(8).
\8\ The proposal meets the criteria, formulated by the
Commission in connection with the petition filed by NetCoalition,
for approval of proposed rule changes concerning the distribution of
non-core market data. See Securities Exchange Act Release Nos. 59039
(December 2, 2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-
2006-21) and 55011 (December 27, 2006) (order granting petition for
review of SR-NYSEArca-2006-021). In its order issued in connection
with the NetCoalition petition, the Commission stated that
``reliance on competitive forces is the most appropriate and
effective means to assess whether the terms for the distribution of
non-core data are equitable, fair and reasonable, and not
unreasonably discriminatory.'' 73 FR at 74781-82. As such, the
``existence of significant competition provides a substantial basis
for finding that the terms of an exchange's fee proposal are
equitable, fair, reasonable, and not unreasonably or unfairly
discriminatory.'' Id. at 74782. If an exchange ``was subject to
significant competitive forces in setting the terms of a proposal,''
a proposal will be approved unless the Commission determines that
``there is a substantial countervailing basis to find that the terms
nevertheless fail to meet an applicable requirement of the Exchange
Act or the rules thereunder.'' Id. at 74781.
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The Commission has reviewed the proposal using the approach set
forth by the Commission for non-core market data fees, and finds that
the proposal meets the criteria for approval. Because Nasdaq was
subject to significant competitive forces in setting the terms of the
proposal, the Commission will approve the proposal in the absence of a
substantial countervailing basis to find that the terms of the proposal
fail to meet the applicable requirements of the Act or the rules
thereunder. An analysis of the proposal does not provide such a basis.
Nasdaq has represented that the Service is a voluntary one, and
that the information provided is not comprised of data that Nasdaq
receives because of Nasdaq's status as a self-regulatory organization.
Because the Service is voluntary, Nasdaq has met the statutory standard
by pricing the Service according to free market principles; indeed, if
Nasdaq priced the Service too high, those in the marketplace could
simply opt not to purchase the Service. The Commission believes that
Nasdaq's fees for the Service are reasonable and equitably allocated.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the Act
\9\, that the proposed rule change (SR-NASDAQ-2010-052), as modified by
Amendment No. 1, be, and it hereby is, approved.
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\9\ 15 U.S.C. 78s(b)(2).
\10\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-15997 Filed 6-30-10; 8:45 am]
BILLING CODE 8010-01-P