Federal Register / Vol. 77, No. 69 / Tuesday, April 10, 2012 / Notices 21607 

29 15 U.S.C. 78f(c)(3)(C). 

30 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

proposed rule change furthers the 

objectives of Section 6(c)(3)(C) of the 

Exchange Act,29 which provides, among 

other things, that a national securities 

exchange may bar any person from 

becoming associated with a member if 

such person does not agree to supply 

the exchange with such information 

with respect to its dealings with the 

member as may be specified by the rules 

of the exchange and to permit the 

examination of its books and records to 

verify the accuracy of any information 

so supplied. The Exchange believes the 

Series 56 examination program 

establishes the appropriate 

qualifications for an individual 

associated person that is required to 

register as a Proprietary Trader under 

proposed Chapter II, Section 8 of the 

BOX Rules, including, but not limited 

to, Market-Makers, proprietary traders 

and individuals effecting transactions 

on behalf of other broker-dealers. The 

Exchange also believes the Series 56 

addresses industry topics that establish 

the foundation for the regulatory and 

procedural knowledge necessary for 

individuals required to register as 

Market Maker Authorized Trader [sic] 

under proposed Chapter VI, Section 2 of 

the BOX Rules. 

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 

The Exchange has neither solicited 

nor received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be 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 email to rulecomments@sec.gov. Please include File 

Number SR–BX–2012–020 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–BX–2012–020. This file 

number should be included on the 

subject line if email 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 on business days between the 

hours of 10 a.m. and 3 p.m. in the 

Commission’s Public Reference Room 

located at 100 F Street NE., Washington, 

DC 20549. 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–BX–2012–020 and should 

be submitted on or before May 1, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8521 Filed 4–9–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66741; No. SR–NASDAQ– 

2012–040] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify 

NASDAQ’s Transaction Execution Fee 

and Credit Schedule 

April 5, 2012. 

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 23, 

2012, The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) a 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the Exchange. 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 modify the 

Exchange’s transaction execution fee 

and credit schedule in Rule 7018. 

NASDAQ will implement the proposed 

change on April 2, 2012. The text of the 

proposed rule change is available at 

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 

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, 


srobinson on DSK4SPTVN1PROD with NOTICES
21608 Federal Register / Vol. 77, No. 69 / Tuesday, April 10, 2012 / Notices 

3Rule 7018(a) applies to executions of 

transactions at a price of $1 or more. Fees for 

transactions at a price below $1 remain unchanged. 

4Securities Exchange Act Release No. 66600 

(March 14, 2012), 77 FR 16298 (March 20, 2012) 

(SR–NYSE–2012–07). 

5 Id. 

6Securities Exchange Act Release No. 66540 

(March 8, 2012), 77 FR 15167 (March 14, 2012) (SR– 

NASDAQ–2012–031). 

7 15 U.S.C. 78f. 

8 15 U.S.C. 78f(b)(4) and (5). 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NASDAQ is amending its fee and 

credit schedule for transaction 

executions in Rule 7018(a).3 First, with 

respect to orders that route to the New 

York Stock Exchange (‘‘NYSE’’) to 

participate in its closing process, 

NASDAQ is increasing the fee from 

$0.00085 per share executed to $0.00095 

per share executed. The proposed 

change mirrors an identical change to 

the fee charged by NYSE for executing 

such orders.4 Second, NASDAQ is 

increasing the monthly cap on fees 

charged for routed orders that execute in 

the NYSE opening process from $10,000 

to $15,000. The proposed change also 

mirrors an identical change made by 

NYSE.5

Third, NASDAQ is amending Rule 

7018(e) to increase the monthly cap for 

orders executed in the NASDAQ 

Opening Cross from $10,000 to $15,000 

per firm. The change is intended to keep 

the charges incurred by members to 

participate in the NASDAQ Opening 

Cross comparable to the charges 

incurred by NYSE members to 

participate in its opening process. 

Fourth, NASDAQ is increasing the 

charge for LIST orders that are routed 

for participation in the NYSEAmex 

closing process from $0.00085 to 

$0.00095. The change is intended to 

maintain consistency between the fees 

charged for closing process orders that 

route to NYSE and NYSEAmex. 

Fifth, NASDAQ is amending Rule 

7018(a) to introduce rebates with 

respect to NASDAQ’s new 

Supplemental Order type, which is 

expected to be introduced in April 

2012.6 Supplemental Orders, which 

resemble the Tracking Orders that have 

long been in use at NYSEArca, are nondisplayed orders that post to the book, 

that are accessed only after other 

liquidity on the NASDAQ book, and 

that execute only at the national best bid 

or best offer (‘‘NBBO’’). NASDAQ is 

setting rebates for use of these orders at 

a level that is equal to or slightly higher 

than prevailing rebate rates for other 

forms of non-displayed orders but lower 

than the rates for displayed liquidity. 

The goal of setting the rebate at these 

levels is to encourage use of the new 

order type, while maintaining 

consistency with NASDAQ’s overall 

pricing philosophy of encouraging 

displayed liquidity. Specifically, the 

rebate will be $0.0018 per share 

executed for Supplemental Orders 

entered through a market participant 

identifier (‘‘MPID’’) through which a 

member provides an average daily 

volume during the month of more than 

1 million shares of liquidity via 

Supplemental Orders, and $0.0015 per 

share executed for all other 

Supplemental Orders. 

2. Statutory Basis 

NASDAQ 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)(4) and 

(5) of the Act,8 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, 

and is not designed to permit unfair 

discrimination between customers, 

issuers, brokers or dealers. All similarly 

situated members are subject to the 

same fee structure, and access to 

NASDAQ is offered on fair and nondiscriminatory terms. 

The proposed changes to the fee to 

route orders to the NYSE closing 

process and the monthly cap on fees 

charged for orders routed to the NYSE 

opening process are reasonable because 

they correspond directly to the fees 

charged by NYSE. These changes reflect 

an equitable allocation of fees because 

they reflect the costs incurred by 

NASDAQ’s routing broker when 

sending orders to NYSE. Finally, the 

changes are not unfairly discriminatory 

because they are charged to members 

that route orders to NYSE and thereby 

require NASDAQ to incur the costs of 

routing such orders. 

The proposed change to the monthly 

cap on fees charged for participation in 

the NASDAQ Opening Cross is 

reasonable because it ensures that total 

monthly costs of members to participate 

in the NASDAQ Opening Cross are 

comparable to the monthly costs of 

members to participate in the opening 

process of NASDAQ’s primary 

competitor. As is currently the case, 

once a member reaches the cap, its 

marginal rate thereafter will be zero and 

its blended rate will decrease with each 

additional transaction. NASDAQ 

believes that the proposed change 

reflects an equitable allocation of fees 

because it believes that the NASDAQ 

Opening Cross provides an extremely 

robust price discovery process for its 

members, and that accordingly, it is 

equitable to increase the maximum fees 

payable by members that participate in 

the process. Finally, NASDAQ believes 

that the change is not unfairly 

discriminatory because it applies solely 

to members that opt to participate in the 

Opening Cross. 

The proposed change to the fee to 

route orders to the NYSEAmex closing 

process is reasonable because it allows 

NASDAQ to maintain an identical fee 

for routing to the NYSE and NYSEAmex 

close. Moreover, although the fee 

charged to NASDAQ by NYSEAmex 

remains $0.00085 per share, NASDAQ 

believes that it is reasonable to charge 

a $0.0001 per share markup on such 

routed orders as a means of assisting 

NASDAQ in covering its own costs of 

operations and earning a profit. 

NASDAQ believes that the change 

reflects an equitable allocation of fees 

because NYSEAmex is not a widely 

used routing destination, and 

accordingly, it is equitable for NASDAQ 

to charge members a markup for making 

use of NASDAQ’s connection to it. 

Finally, NASDAQ believes that the 

change is not unfairly discriminatory 

because it applies solely to members 

that route orders to NYSEAmex. 

The proposed rebates for 

Supplemental Orders are reasonable 

because they are consistent with or 

slightly higher than rebates currently 

paid with respect to other nondisplayed orders. NASDAQ believes 

that it is reasonable to set the rebate at 

this level as a means of promoting use 

of this new feature of its market. 

NASDAQ further believes that the 

rebates reflect an equitable allocation of 

fees because Supplemental Orders are 

designed to provide an additional 

means by which members may offer 

liquidity at the NBBO. Accordingly, the 

orders are designed to benefit not only 

members that enter them, but also 

members that can access additional 

liquidity at the NBBO. NASDAQ 

believes that it is equitable to set the 

rebates associated with use of these 

orders at a level that is designed to 

provide these benefits. Finally, 

NASDAQ believes that the rebates are 

not unfairly discriminatory, in that they 

are set at levels that NASDAQ believes 

to be consistent with both its overall 

pricing philosophy with respect to nondisplayed orders and the goal of 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 69 / Tuesday, April 10, 2012 / Notices 21609 

9 15 U.S.C. 78s(b)(3)(A)(ii). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

introducing Supplemental Orders to the 

market. 

Finally, NASDAQ notes that it 

operates in a highly competitive market 

in which market participants can 

readily favor competing venues if they 

deem fee levels at a particular venue to 

be excessive. In such an environment, 

NASDAQ must continually adjust its 

fees to remain competitive with other 

exchanges and with alternative trading 

systems that have been exempted from 

compliance with the statutory standards 

applicable to exchanges. Because 

numerous alternatives exist to the 

execution and routing services offered 

by NASDAQ, if NASDAQ increases its 

fees to an excessive extent, it will lose 

customers to its competitors. 

Accordingly, NASDAQ believes that 

competitive market forces help to 

ensure that the fees it charges for 

execution and routing are reasonable, 

equitably allocated, and nondiscriminatory. 

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 and 

routing execution is extremely 

competitive, members may readily opt 

to disfavor NASDAQ’s execution 

services if they believe that alternatives 

offer them better value. Accordingly, 

NASDAQ does not believe that the 

proposed changes will unfairly affect 

the ability of members or competitors to 

maintain their competitive standing in 

the financial markets. 

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.9 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 email to rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2012–040 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–2012–040. This 

file number should be included on the 

subject line if email 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–2012–040 and should be 

submitted on or before May 1, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8581 Filed 4–9–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66740; File No. SR– 

NASDAQ–2012–042] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Re-Organize 

NASDAQ’s Rules Governing the Fees 

Applicable to NASDAQ’s Depth-ofBook Market Data 

April 5, 2012. 

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 28, 

2012, 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. 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 the Substance 

of the Proposed Rule Change 

NASDAQ proposes to: (1) Re-organize 

NASDAQ’s rules governing the fees 

applicable to NASDAQ’s Depth-of-Book 

market data; and (2) establish an 

Enterprise License for Non-Professional 

Usage of certain NASDAQ Depth-ofBook market data. 

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, 

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 


srobinson on DSK4SPTVN1PROD with NOTICES