[Federal Register Volume 75, Number 198 (Thursday, October 14, 2010)]
[Notices]
[Pages 63235-63236]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-25745]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63055; File No. SR-NASDAQ-2010-124]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the NASDAQ Stock Market LLC
Relating to Fees During Opening Cross
October 6, 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 September 29, 2010, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``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 Substance
of the Proposed Rule Change
The Exchange proposes to modify Exchange Rule 7050 governing
pricing for NASDAQ members using the NASDAQ Options Market (``NOM''),
NASDAQ's facility for executing and routing standardized equity and
index options. Specifically, NOM proposes to amend the applicability of
its Fees for Execution of Contracts on the NASDAQ Options Market to the
Opening Cross.\3\
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\3\ See Exchange Chapter VI, Section 8 titled Nasdaq Opening
Cross.
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While changes pursuant to this proposal are effective upon filing,
the Exchange has designated these changes to be operative for
transactions on October 1, 2010.
The text of the proposed rule change is set forth below. Proposed
new text is in italics and deleted text is in [lsqbb]brackets[rsqbb].
* * * * *
7050. NASDAQ Options Market
The following charges shall apply to the use of the order execution
and routing services of the NASDAQ Options Market for all securities.
(1) Fees for Execution of Contracts on the NASDAQ Options Market
Fees and Rebates (per executed contract)
----------------------------------------------------------------------------------------------------------------
Non-NOM
Customer Firm market NOM market
maker maker
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Penny Pilot Options: ........... ........... ........... ...........
Rebate to Add Liquidity................................. $0.32 $0.10 $0.25 $0.30
Fee for Removing Liquidity.............................. $0.43 $0.45 $0.45 $0.45
NDX and MNX: ........... ........... ........... ...........
Rebate to Add Liquidity................................. $0.10 $0.10 $0.10 $0.20
Fee for Removing Liquidity.............................. $0.50 $0.50 $0.50 $0.40
All Other Options: ........... ........... ........... ...........
Fee for Adding Liquidity................................ $0.00 $0.45 $0.45 $0.30
Fee for Removing Liquidity.............................. $0.43 $0.45 $0.45 $0.45
Rebate to Add Liquidity................................. $0.20 $0.00 $0.00 $0.00
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(2) Opening Cross
All orders executed in the Opening Cross: [No Charge]
Customer orders will receive the Rebate to Add Liquidity during the
Exchange's Opening Cross, unless the contra-side is also a Customer.
Firms, Non-NOM Market Makers and NOM Market Makers will be assessed the
Fee for Removing Liquidity during the Exchange's Opening Cross.
(3) Closing Cross
* * * * *
The text of the proposed rule change is available on the Exchange's
website at http://www.nasdaqomx.cchwallstreet.com, at the principal
office of the Exchange, 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 proposing to modify Rule 7050 governing the fees assessed
for options orders entered into NOM. Specifically, NASDAQ is proposing
to modify pricing for its Fees for Execution of Contracts on NOM with
respect to orders during the Exchange's Opening Cross. The Exchange
believes that its proposal will incentivize routers to send
[[Page 63236]]
increased order flow during the Opening Cross.
The Exchange currently does not assess transaction fees during the
Opening Cross. The Exchange is proposing to amend its fees to pay a
rebate for Customer orders that are executed during the Opening Cross.
The Exchange would not pay the rebate if a Customer were the contra-
side of the trade.
Additionally, the Exchange is proposing to assess a Fee for
Removing Liquidity to Firms, Non-Nom Market Makers and NOM Market
Makers for executed transactions during the Exchange's Opening Cross.
While changes pursuant to this proposal are effective upon filing,
the Exchange has designated these changes to be operative for
transactions on October 1, 2010.
2. Statutory Basis
NASDAQ believes that the proposed rule changes are consistent with
the provisions of Section 6 of the Act,\4\ in general, and with Section
6(b)(4) of the Act,\5\ 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. The Exchange believes the proposed
amendments to the fees and rebates for adding and removing liquidity
are equitable and reasonable because they are within the range of fees
assessed by other exchanges employing similar pricing schemes and that
the proposed fees apply fairly to all similarly situated participants
on NOM for reasons discussed in greater detail below.
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\4\ 15 U.S.C. 78f.
\5\ 15 U.S.C. 78f(b)(4).
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With respect to the proposed rebates to Customer for executing
orders during the Opening Cross, the Exchange believes that Customers
will benefit from this rebate. Currently, there is no rebate and the
rebate will only be proposed to be paid if another Customer is not on
the contra-side of the transactions. This proposal will benefit
Customers and incentivize market participant to route Customer orders
to the Exchange. For these reasons, the Exchange believes that this
proposal is both equitable and reasonable.
The Exchange's proposal to assess a Fee for Removing Liquidity on
all market participants other than Customers, namely Firms, Non-NOM
Market Makers and NOM Market Makers, during the Opening Cross is
reasonable because the fees are within the range of fees assessed by
other exchanges employing similar pricing schemes. The proposal is
equitable because it is being equally assessed on all market
participants, other than Customers.
NASDAQ is one of eight options market in the national market system
for standardized options. It is a mature, robust market that is highly
competitive. Joining NASDAQ and electing to trade options is entirely
voluntary. Under these circumstances, NASDAQ's fees must be
competitive, fair and just in order for NASDAQ to attract order flow,
execute orders, and grow as a market. NASDAQ thus believes that its
fees are equitable, fair and reasonable and consistent with the
Exchange Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or 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.\6\ 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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\6\ 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-2010-124 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-2010-124. 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 inspection and copying in the
Commission's Public Reference Room. Copies of the 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-2010-124 and
should be submitted on or before November 4, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-25745 Filed 10-13-10; 8:45 am]
BILLING CODE 8011-01-P