Federal Register / Vol. 76, No. 33 / Thursday, February 17, 2011 / Notices 9395 

14See Securities Exchange Act Release No. 63291 

(Nov. 9, 2010). 15 15 U.S.C. 78s(b)(3)(a)(ii). 

16 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

market information from one platform 

may not be a perfect substitute for 

market information from one or more 

other platforms, the existence of 

alternative sources of information can 

be expected to constrain the prices 

platforms charge for market data. 

Besides the fact that similar 

information can be obtained elsewhere, 

the feasibility of supra-competitive 

pricing is constrained by the traders’ 

ability to shift their trades elsewhere, 

which lowers the activity on the 

exchange and so in the long run reduces 

the quality of the information generated 

by the exchange. 

Competition among platforms has 

driven NASDAQ continually to improve 

its platform data offerings and to cater 

to customers’ data needs. For example, 

NASDAQ has developed and 

maintained multiple delivery 

mechanisms (IP, multi-cast, and 

compression) that enable customers to 

receive data in the form and manner 

they prefer and at the lowest cost to 

them. NASDAQ offers front end 

applications such as its ‘‘Bookviewer’’ to 

help customers utilize data. NASDAQ 

has created new products like 

TotalView Aggregate to complement 

TotalView ITCH and Level 2, because 

offering data in multiple formatting 

allows NASDAQ to better fit customer 

needs. NASDAQ offers data via multiple 

extranet providers, thereby helping to 

reduce network and total cost for its 

data products. NASDAQ has developed 

an online administrative system to 

provide customers transparency into 

their data feed requests and streamline 

data usage reporting. NASDAQ has also 

expanded its Enterprise License options 

that reduce the administrative burden 

and costs to firms that purchase market 

data. 

Despite these enhancements and a 

dramatic increase in message traffic, 

NASDAQ’s fees for depth-of-book data 

have remained flat. In fact, as a percent 

of total customer costs, NASDAQ data 

fees have fallen relative to other data 

usage costs—including bandwidth, 

programming, and infrastructure—that 

have risen. The same holds true for 

execution services; despite numerous 

enhancements to NASDAQ’s trading 

platform, absolute and relative trading 

costs have declined. Platform 

competition has intensified as new 

entrants have emerged, constraining 

prices for both executions and for data. 

Additional evidence cited by NYSE 

Arca in SR–NYSE Arca–2010–097 14

which was not before the NetCoalition 

court also demonstrates that availability 

of depth data attracts order flow and 

that competition for order flow can 

constrain the price of market data: 

1. Terrence Hendershott & Charles M. 

Jones, Island Goes Dark: Transparence, 

Fragmentation, and Regulation, 18 

Review of Financial Studies 743 (2005); 

2. Charts and Tables referenced in 

Exhibit 3B to that filing; 

3. PHB Hagler Bailly, Inc., ‘‘Issues 

Surrounding Cost-Based Regulation of 

Market Data Prices;’’ and 

4. PHB Hagler Bailly, Inc., ‘‘The 

Economic Perspective on Regulation of 

Market Data.’’ 

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.15 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. 

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 rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2011–021 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–2011–021. 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–2011–021 and should be 

submitted on or before March 10, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–3583 Filed 2–16–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63893; File No. SR– 

NASDAQ–2011–023] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Add 

Routing Option SOLV and 

Corresponding Fees 

February 11, 2011. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2


jlentini on DSKJ8SOYB1PROD with NOTICES
9396 Federal Register / Vol. 76, No. 33 / Thursday, February 17, 2011 / Notices 

3As provided in Rule 4758(a)(1)(A), the term 

‘‘System routing table’’ refers to the proprietary 

process for determining the specific trading venues 

to which the System routes orders and the order in 

which it routes them. NASDAQ reserves the right 

to maintain a different System routing table for 

different routing options and to modify the System 

routing table at any time without notice. 

4Pursuant to NASDAQ Rule 4758(a)(1)(B), if a 

routed order is returned, in whole or in part, that 

order will receive a new time stamp reflecting the 

time of its return to the System. 

5Securities Exchange Act Release No. 63147 

(October 21, 2010), 75 FR 66183 (October 27, 2010) 

(SR–BATS–2010–029). 

6The fee is currently $0.0013 per share executed, 

but NASDAQ OMX PSX anticipates increasing the 

fee to $0.0025 per share executed as of February 1, 

2011. 

7 15 U.S.C. 78f. 

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78f. 

10 15 U.S.C. 78f(b)(5). 

notice is hereby given that on February 

4, 2011, The NASDAQ Stock Market 

LLC (the ‘‘Exchange’’ or ‘‘Nasdaq’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been substantially prepared by Nasdaq. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

NASDAQ proposes to amend 

NASDAQ Rule 4758 to add a new 

routing option, SOLV, and add 

corresponding fees to the fee schedule. 

The text of the proposed rule change 

is available on Nasdaq’s Web site 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, 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to add a 

routing strategy, SOLV, that will offer 

members a means of accessing liquidity 

in a wide range of execution venues at 

varying price levels. SOLV will operate 

in the same manner as the current SAVE 

strategy in most respects, but will differ 

in the treatment of shares that remain 

unexecuted after completing the order 

route and posting to the NASDAQ book. 

Whereas such shares under SAVE, if 

locked or crossed by another market 

center, are not routed to the locking or 

crossing market center, SOLV orders 

will be routed out for execution at the 

other market center. 

Under the new SOLV routing option, 

like under the current SAVE routing 

option, a market participant may specify 

that an order will either (i) route to 

NASDAQ OMX BX (‘‘BX’’) and 

NASDAQ OMX PSX (‘‘PSX’’), then check 

the NASDAQ book, and then route to 

other venues on the SOLV System 

routing table, or (ii) check the NASDAQ 

book first and then route to destinations 

on the SOLV System routing table.3

Under the second option, the applicable 

routing table includes BX and PSX, and 

as is the case with all market 

destinations, the placement of BX and 

PSX on the routing table depends on 

NASDAQ’s ongoing assessments of 

factors such as latency, fill rates, 

reliability, and cost. Under either 

routing option in SOLV and SAVE, 

shares that remain unexecuted after this 

routing are then posted on the NASDAQ 

book.4 Under SOLV, however, unlike 

under SAVE, unexecuted shares posted 

to the NASDAQ book will be routed out 

if the order is locked or crossed by 

another market center. 

NASDAQ has designed SOLV to 

comply with the requirements of Rule 

611 of Regulation NMS, and believes 

that SOLV, like all NASDAQ routing 

strategies, conforms to Reg-NMS 

requirements. 

SOLV is similar in concept to a 

routing strategy offered by BATS called 

‘‘SLIM,’’ under which an order checks 

the System for available shares, is 

routed to BATS Y–Exchange, Inc. and 

then is sent to destinations on the 

System routing table before posting to 

the book.5

This rule change also amends the fee 

schedule to account for the SOLV 

routing strategy. The fees charged for 

SOLV are the same as currently charged 

under SAVE. Under Rule 7018, 

NASDAQ passes through, without 

modification, applicable BX and PSX 

fees or rebates. In the case of BX, this 

means that NASDAQ passes through the 

$0.0014 per share executed credit paid 

by BX to market participants when 

accessing liquidity, and in the case of 

PSX, NASDAQ will pass through the fee 

charged by PSX to market participants 

when accessing liquidity.6 SOLV thus 

provides market participants with the 

option of routing to a venue with a 

negative execution cost (BX) and a 

relatively lower execution cost (PSX) 

before accessing liquidity on NASDAQ 

and other venues. Market participants 

that wish to access NASDAQ before 

routing to BX and PSX may also do so 

using SOLV, and will receive the same 

pricing as those that opt to route to BX 

and PSX first, subject to the fact that 

they are likely to have more shares 

executed on NASDAQ, at a higher cost, 

than those that use SOLV to route to BX 

and PSX first. SOLV orders that execute 

at venues other than NASDAQ, BX or 

PSX or NYSE will be charged $0.0026 

per share executed, orders that execute 

at NYSE will be charged $0.0022 per 

share executed, and orders that execute 

in NASDAQ are charged the same 

execution fee as SAVE, which is 

$0.0027 per share executed. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,7

in general, and with Sections 6(b)(5) of 

the Act,8 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. The 

Exchange believes that the proposed 

routing option will accomplish those 

ends by providing more flexible options, 

insomuch as it offers NASDAQ 

members a routing strategy with a wide 

range of execution venues at varying 

price levels. 

The rule change is also consistent 

with Section 6 of the Act,9 in general, 

and with Sections 6(b)(5) of the Act,10

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 fees assessed 

for SOLV are the same fees and rebates 

currently charged for the similar routing 

strategy SAVE. Use of the routing option 

is, of course, entirely voluntary. 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 76, No. 33 / Thursday, February 17, 2011 / Notices 9397 

11 15 U.S.C. 78s(b)(3)(A)(iii). 

12 17 CFR 240.19b–4(f)(6). 

13 15 U.S.C. 78s(b)(3)(A). 

14 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of the Exchange’s 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. The Exchange 

has satisfied this requirement. 

15The text of the proposed rule change is 

available on the Commission’s Web site at http:// 

www.sec.gov. 

16 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

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 Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 11 and Rule 

19b–4(f)(6) thereunder.12 Because the 

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 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 13 and Rule 19b–4(f)(6) 

thereunder.14

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 rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2011–023 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–2011–023. 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.15 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–2011–023 and should be 

submitted on or before March 10, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–3584 Filed 2–16–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63900; File No. SR– 

NASDAQ–2011–026] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Offer 

Additional Routing Option 

February 14, 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 

10, 2011, The NASDAQ Stock Market 

LLC (‘‘NASDAQ’’ or the ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the Exchange. 

NASDAQ has designated the proposed 

rule change as constituting a rule 

change under Rule 19b–4(f)(6) under the 

Act,3 which renders the proposal 

effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing this proposed 

rule change to offer an additional 

routing option. NASDAQ proposes to 

implement the proposed rule change on 

February 22, 2011 or as soon thereafter 

as practicable. 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. 


jlentini on DSKJ8SOYB1PROD with NOTICES