[Federal Register Volume 75, Number 156 (Friday, August 13, 2010)]
[Notices]
[Pages 49543-49544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-19972]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62663; File No. SR-NASDAQ-2010-077]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Approving a Proposed Rule Change Relating to Pricing for Direct Circuit
Connections
August 9, 2010.
On June 21, 2010, The NASDAQ Stock Market LLC (``NASDAQ'' or the
``Exchange'') 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 pricing for 10Gb direct circuit
connections and codify pricing for 1Gb direct circuit connections for
customers who are not co-located in NASDAQ's datacenter. The proposed
rule change was published for comment in the Federal Register on July
6, 2010.\3\ The Commission received no comment letters 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. 62392 (July 6,
2010), 75 FR 38857 (``Notice'').
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In its proposal, NASDAQ proposed to establish fees for direct 10Gb
circuit connections, and codify fees for direct circuit connections
capable of supporting up to 1Gb, for customers who are not co-located
at the Exchange's datacenter. NASDAQ represented that it already makes
available to co-located customers a 10Gb circuit connection and charges
for each a $1000 initial installation charge as well as an ongoing
[[Page 49544]]
monthly fee of $5000. The Exchange proposed to establish the same fees
for non-co-located customers with a 10Gb circuit connection.\4\
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\4\ According to the Exchange, NASDAQ provides an additional 1Gb
copper connection option for co-located customers. NASDAQ
represented that, given the technological constraints of copper
connections over longer distances, it does not offer a copper
connection option to users outside of its datacenter.
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NASDAQ represented that it also already makes available to both co-
located and non-co-located customers direct connections capable of
supporting up to 1Gb, with per connection monthly fees of $500 for co-
located customers and $1000 for non co-located customers. According to
the Exchange, monthly fees are higher for non-co-located customers
because direct connections require NASDAQ to provide cabinet space and
middleware for those customers' third-party vendors to connect into the
datacenter and, ultimately, to the trading system. Finally, the
Exchange represented that for non-co-located customers, it charges an
optional installation fee of $925 if the customer chooses to use an on-
site router.
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange.\5\
In particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\6\ 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 persons using its facilities, and with Section
6(b)(5) of the Act,\7\ which requires, among other things, that the
rules of a national securities exchange be designed to promote just and
equitable principles of trade, 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, and not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\5\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
\6\ 15 U.S.C. 78f(b)(4).
\7\ 15 U.S.C. 78f(b)(5).
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The Commission believes that the proposed fees for 10Gb and 1Gb
direct circuit connections are reasonable and equitably allocated
insofar as they are applied on the same terms to similarly-situated
market participants. In addition, the Commission believes that the
connectivity options described in the proposed rule change are not
unfairly discriminatory because NASDAQ makes the 10Gb and 1Gb direct
circuit connections uniformly available to all non-co-located customers
who voluntarily request them and pay the fees as detailed in the
proposal. As represented by NASDAQ, these fees are uniform for all such
customers and are either the same as fees charged to co-located
customers, or vary due to different costs incurred by NASDAQ associated
with providing service to the two different customer types. Finally,
the Commission believes that the proposal will further the protection
of investors and the public interest because it will provide greater
transparency regarding the connectivity options available to market
participants.
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\8\ that the proposed rule change (SR-NASDAQ-2010-077) be, and
hereby is, approved.
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\8\ 15 U.S.C. 78s(b)(2).
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. 2010-19972 Filed 8-12-10; 8:45 am]
BILLING CODE 8010-01-P