[Federal Register Volume 75, Number 170 (Thursday, September 2, 2010)]
[Notices]
[Pages 53996-53997]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-21933]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62785; File No. SR-NASDAQ-2010-106]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify Fees Assessed to Members Using the NASDAQ Market Center
August 27, 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 August 25, 2010, The NASDAQ Stock Market LLC (``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 NASDAQ. 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 proposes to modify pricing assessed to NASDAQ members using
the NASDAQ Market Center. NASDAQ will implement the proposed change on
September 1, 2010. The text of the proposed rule change is available at
http://nasdaqomx.cchwallstreet.com/, at NASDAQ'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, NASDAQ 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. NASDAQ 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 proposing to reduce fees assessed members for routing
odd-lot directed orders. NASDAQ assesses
[[Page 53997]]
different fees for orders directed to the New York Stock Exchange
(``NYSE'') that do not attempt to execute in the Nasdaq Market Center
prior to routing based on whether the order is an odd-lot or round-lot.
In this regard, NASDAQ currently assesses a fee of $0.0021 for round-
lot directed orders that execute on the NYSE, an amount equal to the
fee assessed NASDAQ by NYSE for executing such orders. NASDAQ assesses
a fee of $0.03 on directed orders that do not attempt to execute in the
Nasdaq Market Center prior to routing and that execute at the NYSE as
an odd-lot transaction, and $0.01 for the odd-lot portion of a [sic]
partial round-lot orders that do not attempt to execute in the Nasdaq
Market Center prior to routing and that execute at the NYSE. The NYSE
executes odd-lot orders on the Odd-lot System, a separate system
designed to execute odd-lot interest that does not expose odd-lot
orders to the market in the NYSE Display Book, but rather executes such
interest against a designated maker as a contra party using a complex
pricing formula to determine the execution price.
The NYSE recently made technical changes that allow odd-lot
interest to be exposed to, and executed against, the general market in
its Display Book and is thus decommissioning its separate Odd-lot
System.\3\ In light of the elimination of any distinction between how
odd-lot and round-lot orders are handled by the NYSE,\4\ NASDAQ is
making minor modifications to its pricing schedule for the routing of
odd-lot orders directed to the NYSE through the NASDAQ Market Center.
NASDAQ is proposing to lower the fees assessed for these directed odd-
lot orders to $0.0021 so that the fee is harmonized with the fee
assessed NASDAQ by the NYSE for any executed directed order.
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\3\ On July 27, 2010, the Commission approved a proposed rule
change by the NYSE to incorporate the receipt and execution of odd-
lot interest into the round lot market and decommission the use of
the NYSE's ``Odd-lot System.'' Securities Exchange Act Release No.
62578 (July 27, 2010), 75 FR 45185 (August 2, 2010) (SR-NYSE-2010-
43).
\4\ The NYSE is transitioning securities on a rolling basis
during the month of August 2010. See http://www.nyse.com/attachment/Trading_In_Shares_Rollout_List.xls.
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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 Section
6(b)(4) of the Act,\6\ 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. NASDAQ believes that, because NYSE
no longer handles routed round-lot and routed odd-lot orders
differently and assesses a single uniform fee for such orders, it is
appropriate for NASDAQ to assess a uniform fee for routing both types
of orders. The harmonized fees also equal the amount assessed NASDAQ by
NYSE for executing such orders. Accordingly, NASDAQ believes that the
reduced fees are both reasonable and equitably allocated to members.
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\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(b)(4).
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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. To the contrary,
NASDAQ believes that the reduced fee will lower costs and encourage
competition. Because the market for order execution and routing is
extremely competitive, members may readily direct orders to NASDAQ's
competitors if they object to the proposed rule change.
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\7\ At any time within 60 days of the filing
of the proposed rule change, the Commission summarily may temporarily
suspend such rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or disapproved.
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\7\ 15 U.S.C. 78s(b)(3)(a)(ii).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change 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-2010-106 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-2010-106. 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 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 offices 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-2010-106, and should be submitted on or before
September 23, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-21933 Filed 9-1-10; 8:45 am]
BILLING CODE 8010-01-P