[Federal Register Volume 76, Number 43 (Friday, March 4, 2011)]
[Notices]
[Pages 12178-12180]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-4900]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63983; File No. SR-NASDAQ-2011-032]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Offer Market Data to the Public at No Charge
February 25, 2011.
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 February 24, 2011, The NASDAQ Stock Market LLC (the
``Exchange'' or ``NASDAQ'') filed with the Securities and Exchange
[[Page 12179]]
Commission (the ``Commission'') the proposed rule change as described
in Items I, II, and III below, which Items have been prepared by
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
NASDAQ is filing this proposed rule change to identify in NASDAQ
Options Market (``NOM'') rules the proprietary data feeds of NOM market
information that NASDAQ makes available at no charge. The text of the
proposed rule change is available at http://nasdaq.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, 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
Chapter VI, Section 1(a)(3) of the NOM Rules currently states that
the NOM trading system includes ``a data feed(s) that can be used to
display without attribution to Participants' MPIDs Displayed Orders on
both the bid and offer side of the market for price levels then within
the Nasdaq Options Market using the minimum price variation applicable
to that security.'' NASDAQ is proposing to modify Section 1(a)(3) to
specify the names and content of the four data feeds that NASDAQ makes
available without charge containing market information related to
trading on NOM.
First, NASDAQ ITCH to Trade Options or ``ITTO'' is a data feed that
provides quotation information for individual orders on the NOM book,
last sale information for trades executed on NOM, and Order Imbalance
Information as set forth in NOM Rules Chapter VI, Section 8. ITTO is
the options equivalent of the NASDAQ TotalView/ITCH data feed that
NASDAQ offers under NASDAQ Rule 7023 with respect to equities traded on
NASDAQ. As with TotalView, members use ITTO to ``build'' their view of
the NOM book by adding individual orders that appear on the feed, and
subtracting individual orders that are executed. The Order Imbalance
Information disseminated via ITTO is described in more detail below.
Best of NASDAQ Options or ``BONO'' is a data feed that provides the
NOM Best Bid and Offer and last sale information for trades executed on
NOM. The NOM Best Bid and Offer and last sale information are identical
to the information that NOM sends the Options Price Regulatory [sic]
Authority (``OPRA'') and which OPRA disseminates via the consolidated
data feed for options. BONO is the options equivalent of the NASDAQ
Basic data feed offered for equities under NASDAQ Rule 7047.
NASDAQ Options Depth at Price or ``DAP'' is a data feed that
provides aggregate quotation information for each price level of
trading interest on the NOM book, last sale data for trades executed on
NOM, and Order Imbalance Information as set forth in NOM Rules Chapter
VI, Section 8. The summary of interest at each price level is useful to
members that seek to add or remove liquidity at various depths of the
NOM book but that do not build a book in the manner described above
with respect to ITTO.
Finally, NASDAQ Options Net Order Imbalance or ``NOIView'' is a
data feed that provides Order Imbalance Information as set forth in NOM
Rules Chapter VI, Section 8. Members use NOIView to participate
effectively in the NOM Opening Cross. It includes the following
information: (1) A Current Reference Price'' [sic] which describes the
trading interest on the NOM book at a given moment; (2) the number of
contracts of eligible trading interest that are paired at the Current
Reference Price; (3) the size of any order imbalance; (4) the buy/sell
direction of any Imbalance; and (5) indicative prices at which the
Nasdaq Opening Cross would occur if the Nasdaq Opening Cross were to
occur at that time. NOIView is available in conjunction with the ITTO
and DAP feeds described above.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\3\ in general and with Sections
6(b)(5) of the Act,\4\ in particular in that it 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.
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\3\ 15 U.S.C. 78f.
\4\ 15 U.S.C. 78f(b)(5).
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In adopting Regulation NMS, the Commission granted self-regulatory
organizations and broker-dealers increased authority and flexibility to
offer new and unique market data to the public. It was believed that
this authority would expand the amount of data available to consumers,
and also spur innovation and competition for the provision of market
data. Nasdaq believes that this proposal is in keeping with those
principles by promoting increased transparency through the
dissemination of more useful proprietary data and also by clarifying
its availability to market participants.
Additionally, NASDAQ is making a voluntary decision to make this
data available. NASDAQ is not required by the Exchange Act in the first
instance to make the data available, unlike the best bid and offer
which must be made available under the Act. NASDAQ chooses to make the
data available as proposed in order to improve market quality, to
attract order flow, and to increase transparency. Once this filing
becomes effective, NASDAQ will be required to continue making the data
available until such time as NASDAQ changes its rule.
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. To the contrary,
offering voluntary and free data feeds promotes competition among
trading platforms by advertising available trading interest and
enabling NOM to attract additional liquidity.
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.
[[Page 12180]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change is effective upon filing pursuant to
Section 19(b)(3)(A) of the Act \5\ and paragraph (f)(6) of Rule 19b-4
thereunder,\6\ in that the proposed rule change: (i) Does not
significantly affect the protection of investors or the public
interest; (ii) does not impose any significant burden on competition;
and (iii) does not become operative for 30 days after the date of the
filing, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest;
provided the self-regulatory organization has given the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of 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.
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\5\ 15 U.S.C. 78s(b)(3)(A).
\6\ 17 CFR 240.19b-4(f)(6).
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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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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-2011-032 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-2011-032.
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 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-2011-032 and should be submitted on or before March 25, 2011.
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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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-4900 Filed 3-3-11; 8:45 am]
BILLING CODE 8011-01-P