[Federal Register Volume 75, Number 218 (Friday, November 12, 2010)]
[Notices]
[Pages 69505-69507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28461]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63253; File No. SR-NASDAQ-2010-144]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NASDAQ Stock Market, LLC
Relating To Access Service Fees
November 5, 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 28, 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 7053, related to fees
governing pricing for NASDAQ members using the NASDAQ Options Market
(``NOM''), NASDAQ's facility for executing and routing standardized
equity and index options. Specifically, the Exchange proposes to adopt
a tiered fee structure for certain Access Services fees.
While fee changes pursuant to this proposal are effective upon
filing, the Exchange has designated these changes to be operative on
November 1, 2010.
The text of the proposed rule change is set forth below. Proposed
new text is underlined and deleted text is in brackets.
* * * * *
7053. NASDAQ Options Market--Access Services
The following charges are assessed by Nasdaq for connectivity to
the NASDAQ Options Market.
(a) Financial Information Exchange (FIX)
------------------------------------------------------------------------
[Ports] [Price]
------------------------------------------------------------------------
[FIX Trading Port].................... [$500/port/month].
[FIX Port for Services Other than [$500/port/month].
Trading].
------------------------------------------------------------------------
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Ports Quantity Price
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FIX Trading Port......................... First 25 ports............. $500/port/month.
Additional ports above 25.. $250/port/month.
FIX Port for Services Other than Trading. First 25 ports............. $500/port/month
Additional ports above 25.. $250/port/month.
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(b) TradeInfo
Members not subscribing to the Nasdaq Workstation using
TradeInfo will be charged a fee of $95 per user per month.
(c) Other Port Fees
The following port fees shall apply in connection with the use
of other trading telecommunication protocols:
[ $500 per month for each port pair.]
------------------------------------------------------------------------
Quantity Price
------------------------------------------------------------------------
First 25 ports............................ $500 per month for each port
pair.
Additional ports above 25................. $250 per month for each port
pair.
------------------------------------------------------------------------
* * * * *
The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaq.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 amend Rule 7053, titled NASDAQ Options
Market--Access Services, to create a tiered fee structure for its
Financial Information Exchange (``FIX'') \3\ Fees and Other Port Fees
\4\ pricing.
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\3\ FIX is a protocol used by NOM market participants for order
entry, modification and cancellation and message transmittal.
\4\ Other Port Fees refer to non-Fix ports used by NOM market
participants for order entry and quotes.
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Currently Rule 7053 contains fees assessed by Nasdaq for
connectivity to NOM. Access Services fees relate to ports used to:
Enter orders into the NASDAQ trading systems; receive market data; and
enter quotes.
The Exchange proposes to amend the current FIX fees, which are
currently $500 per month/per port for a Fix Trading Port or a FIX Port
for Services Other than Trading. The Exchange proposes to assess the
following tiered fees:
[[Page 69506]]
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Ports Quantity Price
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FIX Trading Port......................... First 25 ports............. $500/port/month.
Additional ports above 25.. $250/port/month.
FIX Port for Services Other than Trading. First 25 ports............. $500/port/month.
Additional ports above 25.. $250/port/month.
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These tiered fees would allow NOM members to incur a lower fee
after the first 25 ports. The NOM member would continue to be assessed
a $500 per month, per port fee for the first 25 ports.\5\
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\5\ According to the Exchange, the tiered fee structure is being
proposed in light of the nature of the NOM architecture, which makes
it necessary for liquidity providers in options to utilize more
ports in comparison to liquidity providers on the NASDAQ Stock
Market. Liquidity providers on NOM may provide liquidity in up to
140,000 different symbols versus approximately 8,500 symbols in
equities. Moreover, several options symbols for a given underlying
may be directly correlated and may require updates to a large number
of symbols simultaneously. For example, a liquidity provider in SPY
options may need to update all 2401 SPY options simultaneously due
to a change in the price of SPY in the equity market.
Further, a NASDAQ Stock Market member, who is both an equity and
options member, is required to have a distinct port(s) for each
market and would be billed according to whether the particular port
was assigned to the equity or options infrastructure. See e-mail
from Angela Dunn, Assistant General Counsel, Exchange, to Richard
Holley, Assistant Director, and Terri Evans, Special Counsel,
Division of Trading and Markets, Commission, on November 4, 2010.
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The Exchange is also proposing to amend the Other Port Fee pricing.
Currently, NOM members are assessed the $500 per month fee for each
port pair. The Exchange proposes to assess the following tiered fees:
------------------------------------------------------------------------
Quantity Price
------------------------------------------------------------------------
First 25 ports............................ $500 per month for each
port pair.
Additional ports above 25................. $250 per month for each port
pair.
------------------------------------------------------------------------
These tiered fees would allow NOM members to incur a lower fee
after the first 25 port pairs.\6\ The NOM member would continue to be
assessed a $500 per month, per port [sic] fee for the first 25 port
pairs. The Exchange does not intend to amend the TradeInfo fee.\7\
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\6\ Id.
\7\ Currently, NOM members not subscribing to the Nasdaq
Workstation using TradeInfo are charged a fee of $95 per user per
month.
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While fee changes pursuant to this proposal are effective upon
filing, the Exchange has designated these changes to be operative on
November 1, 2010.
2. Statutory Basis
NASDAQ believes that the proposed rule changes are consistent with
the provisions of Section 6 of the Act,\8\ in general, and with Section
6(b)(4) of the Act,\9\ 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.
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\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(4).
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The Exchange believes the proposed amendments to Rule 7053 to
established tiered pricing for FIX and Other Port Fees pricing is
reasonable to incentivize members by proving [sic] a discount for the
quantity of ports or port pairs to which they subscribe. Also, the
Exchange believes that the pricing proposal is equitable because all
NOM members are assessed the same rates.
2. Statutory Basis [sic]
NASDAQ believes that the proposed rule changes are consistent with
the provisions of Section 6 of the Act,\10\ in general, and with
Section 6(b)(4) of the Act,\11\ 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.
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\10\ 15 U.S.C. 78f.
\11\ 15 U.S.C. 78f(b)(4).
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The Exchange believes the proposed amendments to Rule 7053 to
establish tiered pricing for FIX and Other Port Fees pricing is
reasonable to incentivize members by proving a discount for the
quantity of ports or port pairs to which they subscribe. Also, the
Exchange believes that the pricing proposal is equitable because all
NOM members are assessed the same rates.
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.\12\ 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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\12\ 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-2010-144 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2010-144. 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
[[Page 69507]]
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 identifying
information from submissions. You should submit only information that
you wish to make publicly available. All submissions should refer to
File Number SR-NASDAQ-2010-144 and should be submitted on or before
December 3, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-28461 Filed 11-10-10; 8:45 am]
BILLING CODE 8011-01-P