[Federal Register Volume 75, Number 244 (Tuesday, December 21, 2010)]
[Notices]
[Pages 80102-80104]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31925]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63536; File No. SR-NASDAQ-2010-163]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to the Collection of Exchange Fees
December 14, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that, on December 8, 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 and II below, which Items
[[Page 80103]]
have been prepared by the 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 Substance
of the Proposed Rule Change
The NASDAQ Stock Market LLC proposes to create a new Rule 7007
titled ``Collection of Exchange Fees and Other Claims--NASDAQ Options
Market'' to require members to provide a clearing account number at the
National Securities Clearing Corporation (``NSCC'') for purposes of
permitting the Exchange to debit any undisputed or final fees, fines,
charges and/or other monetary sanctions or monies due and owing to the
Exchange.
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. 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to create an efficient
method of collecting undisputed or final fees, fines, charges and/or
other monetary sanctions or monies due and owing to the Exchange from
NASDAQ Options Market (``NOM'') members.\3\ This proposal would provide
a cost savings to the Exchange by alleviating administrative processes
related to the collection of monies owed to the Exchange. Collection
matters divert staff resources away from the Exchange's regulatory and
business purposes. In addition, the debiting process would prevent
member accounts from becoming overdue.
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\3\ The Exchange will not debit accounts for fees that are
unusually large or for special circumstances, unless such debiting
is requested by the member.
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Currently, the Exchange issues monthly invoices to NOM members,
which invoices are paid by NOM members directly to the Exchange's
accounting department. The Exchange proposes to require NOM members and
applicants to provide a clearing account number for an account at NSCC
in order to permit the Exchange to debit any undisputed or final fees,
fines, charges and/or monetary sanctions or other monies due and owing
to the Exchange or other charges related to Rule 1002(c)(2).\4\
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\4\ Exchange Rule 1002(c)(1) titled Payment of Fees, Dues,
Assessments, and Other Charges by Members and Associated Persons,
states that fees, dues, assessments, and other charges shall be
called and payable by members and associated persons as determined
by Nasdaq from time to time.
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The Exchange would continue to send a monthly invoice \5\ to each
NOM member on approximately the 4th-6th business day of the following
month. The Exchange would also send a file to NSCC each month on
approximately the 23rd of the following month to initiate the debit of
the appropriate amount stated on the member's invoice for the prior
month. Because the members would receive an invoice well before any
monies are debited (normally within two weeks), the members would have
adequate time to contact the staff with any questions concerning their
invoice.
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\5\ The monthly invoice will indicate that the amount on the
invoice will be debited from the designated NSCC account. Each
month, the Exchange will send a file to the member's clearing firm
which will indicate the amounts to be debited from each member. If a
member is ``self-clearing,'' no such file would be sent as the
member would receive the invoice, as noted above, which would
indicate the amount to be debited.
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If a NOM member disagrees with the invoice, the Exchange would not
commence the debit until the dispute is resolved. Specifically, if a
member disputes an invoice, the Exchange will not include the disputed
amount in the debit if the member has disputed the amount in writing to
the Exchange's designated staff by the 15th of the month, or the
following business day if the 15th is not a business day, and the
amount in dispute is at least $10,000 or greater.
Once NSCC receives the file from the Exchange, NSCC would proceed
to debit the amounts indicated from the clearing members' account. In
the instance where the member clears through an Exchange clearing
member, the estimated transactions fees owed to the Exchange are
typically debited by the clearing member on a daily basis in order to
ensure adequate funds have been escrowed. The Exchange would debit any
monies owed including undisputed or final fees,\6\ fines, charges and/
or monetary sanctions or monies due and owed to the Exchange.\7\ The
Exchange believes that the debit process would eliminate the risk of
unpaid invoices because of the large amounts of capital held at NSCC by
members.
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\6\ See applicable Exchange fees at Rule 7050 and Rule 7053.
\7\ This includes, among other things, fines which result from:
violations of the Minor Rule Plan pursuant to Chapter X, Section 7
and monetary sanctions pursuant to Rule 8310, 8320 or 8330. With
respect to disciplinary sanctions, the Exchange would not debit any
monies until such action is final. The Exchange would not consider
an action final until all appeal periods have run and/or all appeal
timeframes are exhausted. With respect to non-disciplinary actions,
the Exchange would similarly not take action to debit a member
account until all appeal periods have run and/or all appeal
timeframes are exhausted. Any uncontested disciplinary or non-
disciplinary actions will be debited, and the amount due will appear
on the members invoice prior to the actual NSCC debit.
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The Exchange is also proposing to amend Exchange Rules 1002,
Qualifications of Nasdaq Members and Associated Persons, and Exchange
Rule 8320, Payment of Fines, Other Monetary Sanctions, or Costs;
Summary Action for Failure to Pay, to reference new Exchange Rule 7007.
The Exchange would provide NOM members with a thirty (30) day
period, upon publication of this rule change, to provide the Membership
Department with an NSCC number.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \8\ in general, and furthers the objectives of Section
6(b)(5) of the Act \9\ in particular, in that it is 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,
by providing its NOM members with an efficient process to pay
undisputed or final fees, fines, charges and/or monetary sanctions or
monies due and owing to the Exchange. The Exchange believes that this
process of debiting NSCC accounts would ease the NOM member's
administrative burden in paying monthly invoices, avoid overdue
balances and provide same day collection from all NOM members, who owe
monies to the Exchange, which results in equitable treatment.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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[[Page 80104]]
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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) \11\
thereunder.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
NASDAQ has satisfied this requirement.
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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.
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-2010-163 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-2010-163. 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,\12\ 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 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-2010-163 and should be submitted on or before
January 11, 2011.
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\12\ The text of the proposed rule change is available on the
Commission's Web site at http://www.sec.gov.
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. 2010-31925 Filed 12-20-10; 8:45 am]
BILLING CODE 8011-01-P