[Federal Register Volume 75, Number 211 (Tuesday, November 2, 2010)]
[Notices]
[Pages 67414-67416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-27664]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63189; File No. SR-NASDAQ-2010-135]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify Prices for Co-Location Services
October 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 October 15, 2010, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') 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. Pursuant to
Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
thereunder,\4\ NASDAQ has designated this proposal as establishing or
changing a due, fee, or other charge, which renders the proposed rule
change effective upon filing. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
NASDAQ proposes to change to modify [sic] pricing for co-location
services NASDAQ will implement the proposed change immediately [sic].
The text of the proposed rule change is available at http://nasdaq.cchwallstreet.com/, at NASDAQ's principal office, on the
Commission's Web site at http://www.sec.gov, 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
The Exchange is proposing to modify its fee schedule \5\ for co-
location services.\6\ These modifications are summarized below:
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\5\ This schedule includes modifications made by SR-NASDAQ-2010-
133, filed with the Commission on October 14, 2010.
\6\ Co-location services are a suite of hardware, power,
telecommunication and other ancillary products and services that
allow users to place their trading and communications equipment in
close physical proximity to the quoting and execution facilities of
the Exchange.
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First, as a result of the entry of the Direct Edge and BATS Y
exchanges into the public market and the availability of other data
feeds, the Exchange is implementing and modifying its
[[Page 67415]]
telecommunications installation and connectivity fees to accommodate
these data linkages for co-located customers. The new fees are: (1)
$125 per-month fee for connectivity to the Arca Best Bid and Offer
feed; (2) a $1,500 per-month fee for connectivity to the new BATS Y
exchange; and (3) a one-time fee of $1000 for the installation of
telecommunications connectivity for the Direct Edge exchange, along
with a per-month fee of $2500 for each of its two markets, EDGA and
EDGX. In connection with the foregoing, the Exchange notes that its
installation fee for Direct Edge is equal to that currently charged for
installation of SIAC, CME,\7\ and BATS connectivity, and that the
monthly rates proposed are based on the anticipated bandwidth needed to
accommodate a particular fee and are similar to connectivity fees
imposed by other vendors.\8\
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\7\ The Exchange is also removing from the fee schedule an
incorrect duplicate $1000 installation fee for CME market data
connectivity.
\8\ Separate fees for market data are charged independently by
individual markets.
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Next, to provide additional flexibility for customers to select
only the equipment they need, the Exchange proposes to separate its
current combined $1750 installation fee for cooling fans and perforated
tiles into separate fees of $1,500 for the fans and $250 for the tiles.
Further, in the area of providing internet bandwidth to users, the
Exchange, responding to decreased demand for lower-level bandwidth
options, is eliminating its current 256kb, 500kb, and1.5Mb options and
replacing them with new 3Mb, 4Mb, and 5Mb options priced at $700, $900,
and $1,100 per month respectively.
Finally, the Exchange is offering various services related to
hardware installation, security and storage including: a custom
installation fee, which will vary depending upon cost, for installing
customized equipment to meet individual customer needs; cabinet caging,
a metal security fencing option to protect customer equipment at a
monthly rate of $3,000, with installation fees individually determined
by the size and complexity of the equipment to be caged; and, lastly, a
monthly cabinet equipment storage fee in the amount of $500. This
storage fee differs from the equipment storage fee of $100 in the
current fee schedule, which relates to temporary storage of equipment
by the Exchange itself rather than in a customer controlled cabinet.
As with all the Exchange' [sic] co-location offerings, use of the
above products and services is completely voluntary, and all products
and services are available on a non-discriminatory basis.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\9\ in general, and with
Section 6(b)(5) of the Act,\10\ 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 filing makes transparent uniform fees imposed for co-
location services.
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\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(5).
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In addition, the Exchange believes that the proposed rule change is
consistent with the provisions of Section 6 of the Act,\11\ in general,
and with Section 6(b)(4) of the Act,\12\ 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 the Exchange operates or controls. In
particular, the Exchange notes that the use of co-location services is
entirely voluntary and made available on a non-discriminatory basis.
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\11\ 15 U.S.C. 78f.
\12\ 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.
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.\13\ 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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\13\ 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, 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-2010-135 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-2010-135. 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
[[Page 67416]]
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-2010-135 and should be submitted
on or before November 23, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-27664 Filed 11-1-10; 8:45 am]
BILLING CODE 8011-01-P