[Federal Register Volume 75, Number 70 (Tuesday, April 13, 2010)]
[Notices]
[Pages 18932-18934]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-8365]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61854; File No. SR-NASDAQ-2010-044]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify Fees for Members Using the NASDAQ Market Center
April 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 March 30, 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. 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 C.F.R. 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 modify pricing for NASDAQ members using the
NASDAQ Market Center. NASDAQ will implement the proposed change on
April 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.
[[Page 18933]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
NASDAQ is making modifications to its pricing schedule for
execution of orders in securities priced at $1 or more through the
NASDAQ Market Center.\5\ First, NASDAQ is eliminating volume-based
pricing tiers that currently apply to executions of orders in the
NASDAQ Market Center for securities listed on NASDAQ or the New York
Stock Exchange (``NYSE''). As a result of this change, the fee to
access liquidity in the NASDAQ Market Center will be $0.0030 per share
executed, regardless of whether the security being traded is listed on
NASDAQ, NYSE, NYSE Amex, or any other listing venue. The change is
designed to ensure that NASDAQ does not lose money on trade executions,
as is currently the case when the order of a member in the most
favorable ``take'' tier (fee of $0.0028 per share executed for members
with an average daily volume of more than 145 million share of
liquidity routed, removed, and/or provided, and more than 35 million
shares of liquidity provided) is matched with the order of a member in
the two most favorable liquidity provider rebate tiers (credit of
$0.00295 per share executed for members providing an average of more
than 95 million share of liquidity per day, or $0.0029 per share
executed for members providing an average of more than 35 million share
of liquidity per day).
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\5\ Fees and credits for executions of orders for securities
priced below $1 remain unchanged.
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Second, NASDAQ is increasing the liquidity provider rebate for
securities listed on exchanges other than NASDAQ and NYSE. Currently,
with respect to displayed quotes/orders, NASDAQ pays a liquidity
provider rebate of $0.0025 per share executed to members providing an
average of between 20,000,001 and 35 million shares of liquidity per
day, and a rebate of $0.0020 per share executed to members providing 20
million or fewer shares of liquidity per day. As a result of the
change, NASDAQ will provide a rebate of $0.0026 per share executed to
members providing 35 million or fewer shares of liquidity per day.
Rebates to members that provide more than 35 million shares of
liquidity per day remain unchanged.
2. Statutory Basis
NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\6\ in general, and with Section
6(b)(4) of the Act,\7\ 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 impact of the price changes upon
the net fees paid by a particular market participant will depend upon a
number of variables, including the relative availability of liquidity
on NASDAQ and other venues, the prices of the market participant's
quotes and orders relative to the national best bid and offer (i.e.,
its propensity to add or remove liquidity), the types of securities
that it trades, and the member's trading volumes. NASDAQ notes that the
proposed elimination of ``take'' tiers will result in a fee schedule
with less variability and will eliminate circumstances in which NASDAQ
loses money on order executions by paying a rebate that is higher than
the take fee it charges. The increase in the rebate for securities
listed on exchanges other than NASDAQ and NYSE is intended to increase
the attractiveness of NASDAQ as a venue for trading these securities.
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\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4).
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NASDAQ notes that it operates in a highly competitive market in
which market participants can readily direct order flow to competing
venues if they deem fee levels at a particular venue to be excessive.
Accordingly, if particular market participants object to the proposed
fee changes, they can avoid paying the fees by directing orders to
other venues. NASDAQ believes that its fees continue to be reasonable
and equitably allocated to members on the basis of whether they opt to
direct orders to NASDAQ.
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. 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 \8\ and subparagraph (f)(2) of Rule 19b-4
thereunder.\9\ At any time within 60 days of the filing of the proposed
rule change, the Commission may summarily abrogate 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.
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\8\ 15 U.S.C. 78s(b)(3)(a)(ii).
\9\ 17 CFR 240.19b-4(f)(2).
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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-2010-044 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-2010-044. 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
[[Page 18934]]
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-2010-044, and should be submitted
on or before May 4, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-8365 Filed 4-12-10; 8:45 am]
BILLING CODE 8011-01-P