77022 Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Notices 

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

6 15 U.S.C. 78f(b)(4). 

7 15 U.S.C. 78s(b)(3)(A)(ii). 

8 17 CFR 240.19b–4(f)(2). 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

clearing firms by OCC on behalf of the 

Exchange. 

The ORF is designed to recover a 

portion of the costs to the Exchange of 

the supervision and regulation of its 

members, including performing routine 

surveillances, investigations, 

examinations, financial monitoring, and 

policy, rulemaking, interpretive, and 

enforcement activities. The Exchange 

believes that revenue generated from the 

ORF, when combined with all of the 

Exchange’s other regulatory fees, will 

cover a material portion, but not all, of 

the Exchange’s regulatory costs. The 

Exchange will continue to monitor the 

amount of revenue collected from the 

ORF to ensure that it, in combination 

with its other regulatory fees and fines, 

do not exceed regulatory costs. If the 

Exchange determines regulatory 

revenues exceed regulatory costs, the 

Exchange will adjust the ORF by 

submitting a fee change filing to the 

Commission. 

While changes to the Fee Schedule 

pursuant to this proposal are effective 

upon filing, the Exchange has 

designated these changes to be operative 

on January 3, 2011. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its schedule of fees 

is consistent with Section 6(b) of the 

Act 5 in general, and furthers the 

objectives of Section 6(b)(4) of the Act 6

in particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members. The 

Exchange believes that the fee change is 

reasonable because the Exchange desires 

to recoup its regulatory expenses while 

also ensuring that the revenue collected 

from the ORF does not exceed 

regulatory costs. The Exchange believes 

that this fee proposal is equitable 

because the increase of the ORF to 

$0.0035 per contract would uniformly 

apply to all market participants who are 

being assessed the ORF. 

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 7 and paragraph 

(f)(2) of Rule 19b–4 8 thereunder. At any 

time within 60 days of the filing of such 

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–Phlx–2010–166 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–Phlx–2010–166. 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 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 

available publicly. All submissions 

should refer to File No. SR–Phlx–2010– 

166 and should be submitted on or 

before January 3, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–31096 Filed 12–9–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63441; File No. SR– 

NASDAQ–2010–152] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Fees for Direct Access to Exchange 

Data 

December 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 November 

24, 2010, 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, II, and III below, which Items 

have been prepared by the selfregulatory organization. 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 an amendment to 

the fee schedule to assess ‘‘direct access’’ 

fees on certain customers receiving 

NASDAQ data within NASDAQ’s colocation facility. The rule filing also 

deletes outdated dated verbiage in the 

fee schedule to eliminate confusion 

regarding application of the fees. 

NASDAQ will implement the proposed 

change on December 1, 2010. The text 

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Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Notices 77023 

3 15 U.S.C. 78f. 

4 15 U.S.C. 78f(b)(5). 

5 15 U.S.C. 78f. 

6 15 U.S.C. 78f(b)(4). 

7 15 U.S.C. 78s(b)(3)(a)(ii). 

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, 

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 

NASDAQ is amending its fee 

schedule to correct an anomaly that 

effectively exempts certain customers 

residing within NASDAQ’s co-location 

facility from paying a monthly fee for 

direct access to NASDAQ data, while 

customers that receive data from an 

extranet and reside outside the colocation facility are assessed the fee. 

The inequity is a result of the definition 

of ‘‘direct access’’ in the fee schedule, 

which does not by its terms clearly 

apply to data feeds provided to 

customers through distributors located 

within the co-located facility. This rule 

filing will expand the definition of 

‘‘direct access’’ and thereby operate to 

assess the same fee on all firms that 

have access to NASDAQ’s raw data 

feeds, whether co-located or not. It will 

also delete terms that are obsolete or 

generally limiting, given the evolution 

of technologies and systems through 

which data may be accessed. 

NASDAQ, like other data providers, 

assesses fees for its real time market 

data. In general, a customer that receives 

a data feed directly from the Exchange 

is assessed a ‘‘direct access’’ fee. If the 

customer then distributes the data, it is 

a ‘‘distributor’’ as defined under the fee 

schedule and pays an ‘‘internal’’ or 

‘‘external’’ distributor fee, depending 

upon whether it distributes the data 

internally or externally. A ‘‘distributor’’ 

is broadly defined to include any entity 

that distributes NASDAQ’s data, 

whether it receives the data feed 

directly from NASDAQ or indirectly 

through another entity. Distributor fees 

apply to distributors located within the 

Exchange’s co-location facility as well 

as those outside of it. 

The definition of what constitutes 

‘‘direct access,’’ however, is limited to 

specific types of communications 

connections, and does not currently 

include the systems by which data is 

delivered through distributors located 

within the co-location facility to their 

customers also located within the colocation facility. As a result, the 

distributor’s customers in the colocation facility are not charged a direct 

access fee, even though they receive 

NASDAQ’s data in its raw data format 

and have the same low latency data 

access as non-co-located extranet 

customers that pay the Direct Access 

fee. 

To correct this disparity, this rule 

filing will include within the definition 

of ‘‘direct access’’ the receipt of 

NASDAQ data within the co-location 

facility. It will also delete terms that, 

while describing various means by 

which data is currently accessed, do not 

clearly or adequately describe all viable 

technological means of accessing data. 

For example, reference to ‘‘the MCI 

Financial Extranet’’ is deleted because 

MCI has become ‘‘Verizon,’’ and Verizon 

no longer has special status among 

extranets as it did when the current rule 

was written. The terms ‘‘Nasdaqoperated Web site, system or 

application’’ are also deleted, as they are 

limiting terms that do not clearly 

encompass potential technological 

means of accessing NASDAQ data. 

Their elimination does not impact the 

fees of any customer currently assessed 

a Direct Access fee, but should preclude 

the need for future rule changes to the 

definition of direct access, as the means 

by which those same customers access 

data evolve over time. 

2. Statutory Basis 

The Exchange 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. 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 filing permits 

transparent, uniform fees for direct 

access to Exchange data for all 

customers, whether co-located or not. 

In addition, the Exchange believes 

that the proposed rule change is 

consistent with the provisions of 

Section 6 of the Act,5 in general, and 

with Section 6(b)(4) of the Act,6 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 The Exchange 

operates or controls. In particular, the 

Exchange notes that the amendment 

corrects an anomaly that effectively 

exempts certain co-located customers 

receiving the data from paying a direct 

access fee. 

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. 

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.7 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: 

mstockstill on DSKH9S0YB1PROD with NOTICES

77024 Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Notices 

8 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 55496 

(March 20, 2007), 72 FR 14631 (March 28, 2007) 

(SR–NYSE–2006–37). 

5The NYSE intends to submit a separate fee filing 

to address the proposed bond trading license. 

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–2010–152 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–2010–152. 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 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 

available publicly. All submissions 

should refer to File Number SR– 

NASDAQ–2010–152 and should be 

submitted on or before January 3, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–31099 Filed 12–9–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63444; File No. SR–NYSE– 

2010–74] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change To 

Create a Bond Trading License for 

Member Organizations and Establish 

Bonds Liquidity Providers as a New 

Market Class on NYSE Under a Pilot 

Program 

December 6, 2010. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on 

November 23, 2010, New York Stock 

Exchange LLC (‘‘NYSE’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the self-regulatory 

organization. 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 proposes to establish a 

twelve-month pilot program to: (1) 

Create a bond trading license for 

member organizations that desire to 

trade only debt securities on the 

Exchange; and (2) establish a new class 

of NYSE market participants, ‘‘Bonds 

Liquidity Providers’’ (‘‘BLPs’’). The text 

of the proposed rule change is available 

at the Exchange, the Commission’s 

Public Reference Room, and http:// 

www.nyse.com. 

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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NYSE proposes a twelve-month pilot 

program to: (1) Adopt new Rule 87 to 

create a bond trading license for 

member organizations that desire to 

trade only debt securities on the NYSE; 

and (2) adopt new Rule 88 to establish 

BLPs, a new class of debt market 

participants, and provide them with 

financial incentives for bringing 

liquidity to the Exchange’s bond market. 

The purpose of the proposed rule 

change is to encourage market 

participants to bring additional liquidity 

to the Exchange’s bond marketplace. 

Background on the Current NYSE Bond 

Trading Platform 

The Exchange began trading bonds 

electronically in 1977 with the 

introduction of the Automated Bond 

System (‘‘ABS’’). In 2007, the Exchange 

retired the ABS system, moved the 

platform to its Archipelago technology, 

and replaced former Rule 86 

(‘‘Automated Bond System’’) with new 

Rule 86 (‘‘NYSE Bonds’’).4 The Exchange 

also filed Rules 1400 and 1401, 

expanding the number of debt issues 

that could be traded on the exchange. 

Bonds eligible to trade on the NYSE 

Bonds platform include any debt 

instrument that is listed on the NYSE 

and any corporate debt of a listed 

company of the Exchange. 

Despite these changes, the Exchange 

has failed to attract meaningful trading 

volume. The NYSE Bonds platform 

executes between 0 and 20 trades per 

day, with an average sized trade of 20 

bonds. Currently, there are no incentive 

programs in place to provide liquidity to 

NYSE Bonds. The Exchange believes 

that the pilot incentive programs 

proposed in this filing will attract 

providers to NYSE Bonds and create 

more liquidity and transparency in the 

retail corporate bond market. 

Bond Trading License 

The Exchange proposes to establish a 

new bonds-only trading license to 

encourage more member organizations 

to trade debt securities on the NYSE.5

Currently, an approved member 

organization may obtain a trading 

license pursuant to Rule 300, which 

permits them to trade all debt and 

equity securities listed on the Exchange. 

mstockstill on DSKH9S0YB1PROD with NOTICES