Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 1907 

5 In approving the proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition and capital 

formation. See 15 U.S.C. 78c(f). 

6 15 U.S.C. 78f(b)(5). 

7See email from Angela Dunn, Associate General 

Counsel, Phlx, to Steve Kuan, Special Counsel, 

Commission, dated January 3, 2013. 

8 15 U.S.C. 78s(b)(2). 

9 17 CFR 200.30–3(a)(12). 

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 CFR 240.19b–4(f)(2). 

5Auction Transactions are those transactions 

executed through the Price Improvement Period 

(‘‘PIP’’), Solicitation, and Facilitation auction 

mechanisms. 

6Professional customers are charged $0.33 per 

contract for Select Symbols on the International 

Securities Exchange (‘‘ISE’’), $0.32 per contract for 

taking liquidity on NYSE Amex, and $0.45 or more 

per contract on the NASDAQ Options Market 

(‘‘NOM’’) for adding or removing liquidity in nonContinued 

securities exchanges.5 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,6 which requires that 

the rules of an exchange be designed, 

among other things, to promote just and 

equitable principles of trade, to prevent 

fraudulent and manipulative acts, to 

remove impediments to and to perfect 

the mechanism for a free and open 

market and a national market system, 

and, in general, to protect investors and 

the public interest. 

The Commission believes that the 

proposal should provide the Exchange 

with a better metric to evaluate the 

quote submission quality of SQTs and 

RSQTs. In particular, the Exchange 

represented that it could capture the 

following data in a report for each SQT 

and RSQT: executed contracts, trade 

count, total quotes, executed contract to 

quote ratio and trade count to quote 

ratio. The Commission believes that 

such additional information, which is 

not available today, should enable the 

Exchange to better judge the quality of 

quotes provided. The proposal would 

analyze the number of contracts 

executed, in addition to the number of 

quotes received by the Exchange. The 

Commission believes that the number of 

executed contracts to quote ratio should 

provide the Exchange with more useful 

information to judge actual liquidity 

supplied on the Exchange. The proposal 

would also analyze the number of trades 

to quotes. The Commission believes that 

this aspect of the proposal is reasonably 

designed to enable the Exchange to 

better evaluate smaller participants, 

who may execute lesser size, but who 

may still have a high trade-to-quote ratio 

if they are present at the national best 

bid or offer. Finally, the Exchange has 

represented that these standards which 

would be applied to all members and 

member organizations of the Exchange 

in a uniform matter that is equitable and 

not unfairly discriminatory.7

For the reasons stated above, the 

Commission believes that the proposal 

is consistent with the requirements of 

the Act and is designed to promote just 

and equitable principles of trade, to 

remove impediments to and to perfect 

the mechanism for a free and open 

market and a national market system, 

and, in general, to protect investors and 

the public interest. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,8 that the 

proposed rule change (SR–Phlx–2012– 

130), be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2013–00201 Filed 1–8–13; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–68578; File No. SR–BOX– 

2012–025] 

Self-Regulatory Organizations; BOX 

Options Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Amend 

the Fee Schedule for Trading on BOX 

DATE: January 3, 2013. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on December 

26, 2012, BOX Options Exchange LLC 

(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 Exchange. The Exchange filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A)(ii) of the Act,3 and 

Rule 19b–4(f)(2) thereunder,4 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 with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

to amend the Fee Schedule for trading 

on BOX. In particular, the Exchange 

proposes to amend certain Exchange 

Fees for Professionals set forth in 

Section I of the Fee Schedule so that 

Professional accounts are assessed the 

same fees as Broker-Dealers. While 

changes to the Fee Schedule pursuant to 

this proposal will be effective upon 

filing, the changes will become 

operative on January 2, 2013. The text 

of the proposed rule change is available 

from the principal office of the 

Exchange, at the Commission’s Public 

Reference Room and also on the 

Exchange’s Internet Web site at http:// 

boxexchange.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 

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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

Fee Schedule for trading on BOX. In 

particular, the Exchange proposes to 

amend certain Exchange Fees for 

Professionals set forth in Section I of the 

Fee Schedule so that Professional 

accounts are assessed the same fees as 

Broker-Dealers. 

For Auction Transactions,5 the 

Exchange proposes to increase 

Professional fees for Improvement 

Orders in the PIP and Responses in the 

Solicitation and Facilitation 

mechanisms from $0.15 to $0.35, the 

same fee Broker-Dealers are currently 

charged. Note that Exchange Fees for 

Primary Improvement Orders, 

Facilitation Orders, and Solicitation 

Orders will continue to be based upon 

a Participant’s monthly average daily 

volume (‘‘ADV’’) in Auction 

Transactions as calculated at the end of 

each month as set forth in Section I.A. 

of the Fee Schedule. The Exchange 

notes that the proposed fees for 

Professionals are within the range of 

Professional fees presently assessed in 

the industry.6


srobinson on DSK4SPTVN1PROD with 
1908 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

Penny Pilot securities. See ISE fee schedule, 

available at: http://www.ise.com/assets/documents/ 

OptionsExchange/legal/fee/fee_schedule.pdf, NYSE 

Amex Options Fee Schedule, available at: https:// 

globalderivatives.nyx.com/sites/ 

globalderivatives.nyx.com/files/ 

nyse_amex_options_fee_schedule_12_01_12_.pdf, 

and see NOM Fee Schedule, available at: http:// 

www.nasdaqtrader.com/ 

Micro.aspx?id=OptionsPricing. 

7 15 U.S.C. 78f(b). 

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

9See Rules 7150(f)(4) and 7270 regarding 

allocation and executions within each BOX auction 

mechanism. 

10Supra, note 6. 

11See Section I.A. of the Fee Schedule that 

provides Tiered Fees with potential discounts for 

Participants that Initiate Auction Transactions. 

Also, the Exchange proposes to 

implement a $0.22 per contract 

surcharge for Professionals for all 

transactions in options on the Nasdaq100® Index (NDX) and on the MiniNDX® Index (MNX). BOX currently 

charges Market Makers and BrokerDealers $0.22 per contract for 

transactions in NDX and MNX. BOX 

incurs licensing fees for transactions in 

these classes of options and believes it 

is appropriate and reasonable to pass 

that fee through to BOX Participants, 

including Professional accounts. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),7 in general, and Section 6(b)(4) 

of the Act,8 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees, and other charges 

among BOX Options Participants and 

other persons using its facilities. 

The Exchange believes the proposed 

fee change for Professionals in Auction 

Transactions is reasonable, equitable 

and not unfairly discriminatory because 

it charges Professionals, whose activity 

on BOX is akin to the order flow activity 

and system usage to that of BrokerDealers, the same fee for competing in 

Auction Transactions as the fee charged 

to Broker-Dealers. BOX does not assess 

ongoing systems access fees, ongoing 

fees for access to BOX market data, or 

fees related to order cancellation. 

Professional accounts, while Public 

Customers by virtue of not being brokerdealers, generally engage in trading 

activity more similar to broker-dealer 

proprietary trading accounts (more than 

390 orders per day on average). BOX 

notes that as of December 2012, orders 

for Professionals generally account for a 

majority of the orders BOX receives on 

a given trading day. This level of trading 

activity draws on a greater amount of 

BOX system resources than that of nonProfessional Public Customers, and 

thus, greater ongoing BOX operational 

costs. Simply, the more orders 

submitted to BOX, the more messages 

sent to and received from BOX, the 

more orders potentially routed to away 

exchanges, and the more BOX system 

resources utilized. As such, rather than 

passing the costs of these higher order 

volumes along to all market 

participants, the Exchange believes it is 

more reasonable and equitable to assess 

those costs to the persons directly 

responsible. To that end, BOX aims to 

recover costs incurred by assessing 

Professional accounts a market 

competitive fee for competing in 

Auction Transactions. 

The Exchange believes the proposed 

change to increase Professional fees is 

not unfairly discriminatory as the fees 

will apply to all Professionals and 

Broker-Dealers competing in Auction 

Transactions equally. Further, 

Professionals and Broker-Dealers are 

free to change the manner in which they 

access BOX. A Professional may, by 

sending fewer than 390 orders per day 

across the industry, begin participating 

as a non-Professional, Public Customer 

and potentially reduce transaction fees. 

Additionally, Professionals will still 

benefit from certain priority advantages 

as a customer in Auction Transactions.9

As noted above, Professionals’ order 

sending behavior and trading activity 

tend to be more similar to BrokerDealers trading on a proprietary basis. 

This is particularly true in considering 

orders in response to BOX auction 

mechanisms. As such, the Exchange 

believes it is not unfairly discriminatory 

to charge them the same fee as BrokerDealers when competing for customer 

order flow in these Auction 

Transactions. 

Professionals may elect to register as 

a Broker-Dealer and, once registered, 

may apply to become a BOX Market 

Maker, subject to Exchange Fees based 

on their ADV. The Exchange believes 

the proposed Auction Transaction fees 

for Professionals is equitable and not 

unfairly discriminatory because such 

Participants are not subject to the same 

obligations as Market Makers when 

providing liquidity to the market. In 

particular, Market Makers must 

maintain active two-sided markets in 

appointed classes, and must meet 

certain minimum quoting requirements. 

As such, the Exchange believes it is 

appropriate that Market Makers be 

charged comparably lower Auction 

Transaction fees as compared to 

Professionals when the Market Makers 

provide greater volumes of liquidity to 

the market. In light of the ability to 

access BOX in a variety of ways, each 

of which is priced differently, 

Professionals, Broker-Dealers, and other 

market participants may each select the 

most economically beneficial manner to 

access BOX. 

Further, the Exchange believes the 

proposed fee change is equitable and 

not unfairly discriminatory because it 

will assure that retail investors (nonProfessional, Public Customers) 

continue to receive the appropriate 

marketplace advantages for Auction 

Transactions on BOX, while furthering 

fair competition among marketplace 

professionals by treating them equally 

when they compete for these desirable 

customer orders. The Exchange believes 

it is reasonable and equitable to assess 

Auction Transaction fees for 

Professionals that are the same as those 

fees for Broker-Dealers because it 

applies a pricing structure that groups 

these sophisticated market participants 

together when they are competing in 

this manner. 

Generally, competing options 

exchanges assess Professionals fees at 

comparable rates to those proposed by 

the Exchange, and comparable to fees 

charged to Broker-Dealers.10 The 

Exchange operates within a highly 

competitive market in which market 

participants can readily direct order 

flow to any of several other competing 

venues if they deem fees at a particular 

venue to be excessive. As such, the 

Exchange believes the proposed 

increases are reasonable and equitable. 

The Exchange further believes the 

proposed fee change is equitable and 

not unfairly discriminatory because 

Professionals generally do not initiate 

Auction Transactions, unlike some 

Broker-Dealers. Doing so requires, in 

part, guaranteeing a customer order and 

execution. Initiating an Auction 

Transaction for the benefit of the 

customer order, an [sic] taking on this 

guarantee provides these Participants 

potentially discounted fees.11 The 

Exchange believes it is reasonable, 

equitable, and not unfairly 

discriminatory to charge Professional 

accounts the same fee as Broker-Dealers 

to compete for customer orders in 

Auction Transactions because when 

acting in response to an auction, as 

opposed to initiating the transaction, 

Professionals’ behavior, systems’ 

sophistication, and trading activity are 

similar to Broker-Dealers, and distinct 

from the retail investors on the opposite 

side of the Auction Transaction. 

The Exchange believes it is equitable 

and not unfairly discriminatory for 

Public Customers to be charged lower 

fees than Professionals and BrokerVerDate Mar<15>2010 16:39 Jan 08, 2013 Jkt 229001 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 E:\FR\FM\09JAN1.SGM 09JAN1

srobinson on DSK4SPTVN1PROD with 
Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 1909 

12Note that BOX has historically imposed 

different, and higher, routing fees for Professionals 

as compared to non-Professional Public Customers. 

See Securities Exchange Act Release Nos. 65538 

(October 12, 2011), 76 FR 64413 (October 18, 2011) 

(Adopting a $0.50 per contract routing fee for 

Professionals while providing routing to nonProfessional Public Customers at no charge), and 

68149 (November 5, 2012), 77 FR 67693 (November 

13, 2012) (Continuing to charge Professionals $0.50 

per contract executed on away exchanges and 

exempting Public Customer accounts from a routing 

fee for Directed Orders, provided 33% or more of 

a Participant’s Public Customer Directed Orders 

received during the month are executed through 

PIP, and less than 45% of a Participant’s Directed 

Orders received during the month are routed to and 

executed on an away exchange). 

13Supra, note 6. 

14 15 U.S.C. 78s(b)(3)(A)(ii). 

15 17 CFR 240.19b–4(f)(2). 

Dealers for Auction Transactions on 

BOX. The securities markets generally, 

and BOX in particular, have historically 

aimed to improve markets for investors 

and develop various features within the 

market structure for the benefit of nonProfessional, Public Customers.12 As 

such, the Exchange believes the 

proposed fees for Professional customer 

transactions are appropriate and not 

unfairly discriminatory. The Exchange 

believes it promotes the best interests of 

investors to have lower Auction 

Transaction costs for non-Professional, 

Public Customers, and that the BOX fee 

structure will continue to attract this 

customer order flow to these auction 

mechanisms which BOX believes will 

provide greater potential price 

improvement to these investors. 

Regarding the surcharge for 

transactions in NDX and MNX, due to 

a licensing agreement with The 

NASDAQ OMX Group, Inc. (‘‘NASDAQ 

OMX’’) to use various indices and 

trademarks in connection with the 

listing and trading of these index 

options, BOX will pay a per contract 

license fee of $0.22 to NASDAQ OMX 

for NDX and MNX options contracts 

traded on BOX. The Exchange proposes 

to assess a surcharge fee for Professional 

transactions in NDX and MNX options 

to offset the costs BOX incurs for each 

such transaction. The Exchange believes 

that passing this cost through to BOX 

Options Participants that trade these 

options, including Professionals, is the 

most equitable means of recovering the 

costs of the license. 

The Exchange’s proposal to assess 

Professionals, Broker-Dealers and 

Market Makers a $.22 per contract 

surcharge for transactions in MNX and 

NDX, as compared to no surcharge being 

assessed to non-Professional Public 

Customers, is equitable and not unfairly 

discriminatory because the Exchange 

believes that a lower fee for nonProfessional, Public Customers benefits 

all BOX market participants by 

incentivizing market participants to 

transact a greater number of Public 

Customer orders, which results in 

increased liquidity on BOX. 

The Exchange believes that the 

proposed fees will keep BOX 

competitive with other exchanges and 

will apply in an equitable manner 

among BOX Participants. The Exchange 

believes the proposed fees are fair and 

reasonable and must be competitive 

with fees in place on other exchanges. 

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. The BOX 

auction mechanisms, the PIP in 

particular, provide the opportunity for 

market participants to compete for 

customer orders. The PIP has no 

limitations regarding the number of 

Market Makers, Options Participants 

that are not Market Makers, and 

customers that can participate and 

compete for orders in the PIP. BOX 

asserts that Participants are actively 

competing for customer orders, which is 

clearly supported by the simple fact that 

price improvement occurs in the PIP. 

Since the PIP began in 2004, customers 

have received more than $400 million in 

savings through better executions on 

BOX, a monthly average of more than 

$3.5 million over that time. 

The Exchange does not believe the 

proposed fee change will inhibit 

Professionals’ ability to compete within 

BOX Auction Transactions. BrokerDealers currently compete actively 

within the PIP, and BOX does not 

believe assessing Professionals a $0.35 

per contract fee equivalent to that of 

Broker-Dealers, would impede 

Professionals’ ability, or the incentive 

for Professionals, to compete therein. 

BOX notes that its market model and 

fees are generally intended to benefit 

retail customers by providing incentives 

for Participants to submit their customer 

order flow to BOX, and the PIP in 

particular. BOX makes a substantial 

amount of PIP-related data and statistics 

available to the public on its Web site 

www.boxexchange.com. Specifically, 

PIP Fee Pilot reports are available at: 

http://boxexchange.com/ 

boxrReports_en; daily PIP volumes and 

average price improvement at: http:// 

boxexchange.com/volumes_en; and 

BOX execution quality reports at: 

http://boxexchange.com/ 

executionQualityReport_en. The data 

indisputably supports that the PIP 

provides price improvement for 

customer orders. 

The fee change proposed would 

charge Professionals the same fee as 

Broker-Dealers when competing in 

Auction Transactions. Because this 

change would charge Professionals 

similarly to Broker-Dealers in this 

particular circumstance, charge them a 

fee comparable to what Professionals 

and Broker-Dealers pay on competing 

exchanges,13 and for additional reasons 

as stated above, the Exchange does not 

believe that the proposed 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 14 and Rule 

19b–4(f)(2) thereunder,15 because it 

establishes or changes a due, fee, or 

other charge applicable only to a 

member. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend the rule change if 

it appears to the Commission that the 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or would otherwise further 

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–BOX–2012–025 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 


srobinson on DSK4SPTVN1PROD with 
1910 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3This filing reflects the change of the name of the 

product from ‘‘NASDAQ Last Sale for NYSE/Amex’’ 

to ‘‘NASDAQ Last Sale for NYSE/NYSE MKT’’ in 

the text of Rule 7039, due to the change in the name 

of NYSE Amex to NYSE MKT. 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–BOX–2012–025. 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 

10:00 a.m. and 3:00 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–BOX– 

2012–025 and should be submitted on 

or before January 30, 2013. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2013–00257 Filed 1–8–13; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–68568; File No. SR– 

NASDAQ–2012–145] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Extend Fee 

Pilot Program for NASDAQ Last Sale 

January 3, 2013. 

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 December 

20, 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, II, and III 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 the Substance 

of the Proposed Rule Change 

NASDAQ is proposing to extend for 

three months the fee pilot pursuant to 

which NASDAQ distributes the 

NASDAQ Last Sale (‘‘NLS’’) market data 

products. NLS allows data distributors 

to have access to real-time market data 

for a capped fee, enabling those 

distributors to provide free access to the 

data to millions of individual investors 

via the Internet and television. 

Specifically, NASDAQ offers the 

‘‘NASDAQ Last Sale for NASDAQ’’ and 

‘‘NASDAQ Last Sale for NYSE/Amex’’ 3

data feeds containing last sale activity in 

U.S. equities within the NASDAQ 

Market Center and reported to the 

FINRA/NASDAQ Trade Reporting 

Facility (‘‘FINRA/NASDAQ TRF’’), 

which is jointly operated by NASDAQ 

and the Financial Industry Regulatory 

Authority (‘‘FINRA’’). The purpose of 

this proposal is to extend the existing 

pilot program for three months, from 

January 1, 2013 to March 31, 2013. 

This pilot program supports the 

aspiration of Regulation NMS to 

increase the availability of proprietary 

data by allowing market forces to 

determine the amount of proprietary 

market data information that is made 

available to the public and at what 

price. During the pilot period, the 

program has vastly increased the 

availability of NASDAQ proprietary 

market data to individual investors. 

Based upon data from NLS distributors, 

NASDAQ believes that since its launch 

in July 2008, the NLS data has been 

viewed by over 50,000,000 investors on 

Web sites operated by Google, 

Interactive Data, and Dow Jones, among 

others. 

The text of the proposed rule change 

is below. Proposed new language is 

italicized; proposed deletions are in 

brackets. 

* * * * * 

7039. NASDAQ Last Sale Data Feeds 

(a) For a three month pilot period 

commencing on [October 1, 2012] January 1, 

2013, NASDAQ shall offer two proprietary 

data feeds containing real-time last sale 

information for trades executed on NASDAQ 

or reported to the NASDAQ/FINRA Trade 

Reporting Facility. 

(1) ‘‘NASDAQ Last Sale for NASDAQ’’ 

shall contain all transaction reports for 

NASDAQ-listed stocks; and 

(2) ‘‘NASDAQ Last Sale for NYSE/ 

[Amex]NYSE MKT’’ shall contain all such 

transaction reports for NYSE- and NYSE 

[Amex]MKT-listed stocks. 

(b) Each distributor of the NASDAQ Last 

Sale Data Feeds may elect between two 

alternate fee schedules, depending upon the 

choice of distributors to report usage based 

on either a username/password entitlement 

system or a quote counting mechanism or 

both. All fees for the NASDAQ Last Sale Data 

Products are ‘‘stair-stepped’’ in that the fees 

are reduced for distributors with more users 

but the lower rates apply only to users in 

excess of the specified thresholds rather than 

applying to all users once a threshold is met. 

In addition, there shall be a maximum fee of 

$50,000 per month for NASDAQ Last Sale for 

NASDAQ and NASDAQ Last Sale for NYSE/ 

[Amex]NYSE MKT. 

(1) Firms that choose to report usage for 

either a username/password entitlement 

system or quote counting mechanism or both 

shall elect between paying a fee for each user 

or a fee for each query. A firm that elects to 

pay for each query may cap its payment at 

the monthly rate per user. Firms shall pay the 

following fees: 

(A) No change. 

(B) NASDAQ Last Sale for NYSE/ 

[Amex]NYSE MKT 

Users/mo Price Quotes Price 

1–9,999 .................................................. $0.30/usermonth .................................. 0–10M .................................................. $0.0015/query. 

10,000–49,999 ....................................... $0.24/usermonth .................................. 10M–20M ............................................. $0.0012/query. 

50,000–99,999 ....................................... $0.18/usermonth .................................. 20M–30M ............................................. $0.0009/query. 


srobinson on DSK4SPTVN1PROD with