Federal Register / Vol. 87, No. 57 / Thursday, March 24, 2022 / Notices 16811 

20 15 U.S.C. 78s(b)(3)(A). 

21 17 CFR 240.19b–4(f)(6). 

22 17 CFR 240.19b–4(f)(6). 

23 17 CFR 240.19b–4(f)(6)(iii). 

24 For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

25 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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 on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: 

A. Significantly affect the protection 

of investors or the public interest; 

B. impose any significant burden on 

competition; and 

C. become operative for 30 days from 

the date on which it was filed, or such 

shorter time as the Commission may 

designate, it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act 20 and Rule 19b–4(f)(6) 21

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 22 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),23 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange asked that the 

Commission waive the 30 day operative 

delay so that the proposal may become 

operative immediately upon filing. 

Extending the Pilot Rules’ effectiveness 

to the close of business on April 18, 

2022 will extend the protections 

provided by the Pilot Rules, which 

would otherwise expire in less than 30 

days. Waiver of the operative delay 

would therefore permit uninterrupted 

continuation of the MWCB pilot while 

the Commission reviews the NYSE’s 

proposed rule change to make the Pilot 

Rules permanent. Therefore, the 

Commission hereby waives the 30-day 

operative delay and designates the 

proposed rule change as operative upon 

filing.24

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 will institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CboeBZX–2022–023 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CboeBZX–2022–023. 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 website (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 website 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. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. 

You should submit only information 

that you wish to make available 

publicly. All submissions should refer 

to File Number SR–CboeBZX–2022–023 

and should be submitted on or before 

April 14, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–06185 Filed 3–23–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94466; File No. SR– 

NASDAQ–2022–024] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Create a 

Monthly Media Enterprise License for 

the Distribution of Nasdaq Basic to the 

General Investing Public for Display 

Usage 

March 18, 2022. 

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 9, 

2022, The Nasdaq Stock Market LLC 

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

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the 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 Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Exchange’s fees to create a monthly 

Media Enterprise License for the 

distribution of Nasdaq Basic to the 

general investing public for Display 

Usage. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/rules, at the principal 

office of the Exchange, 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 


khammond on DSKJM1Z7X2PROD with NOTICES
16812 Federal Register / Vol. 87, No. 57 / Thursday, March 24, 2022 / Notices 

3The Exchange initially filed the proposed 

pricing changes on January 31, 2022 (SR– 

NASDAQ–2022–014). On February 14, 2022, the 

Exchange withdrew that filing and submitted a new 

filing (SR–NASDAQ–2022–016). The second filing 

was withdrawn on February 28, 2022, and replaced 

with another filing (SR–NASDAQ–2022–018). This 

last filing was withdrawn on March 9, 2022, and 

replaced with this filing. 

4Last sale transaction reports are available from 

both Nasdaq Last Sale and Nasdaq Last Sale Plus. 

See Equity 7, Section 139(e) (‘‘NLS Plus may be 

received by itself or in combination with Nasdaq 

Basic.’’). The customer that purchases Nasdaq Basic 

will also receive Nasdaq Last Sale because it is a 

component of Nasdaq Basic. 5The term ‘‘Distributor’’ refers to any entity that 

receives Nasdaq Basic data directly from Nasdaq or 

indirectly through another entity and then 

distributes it to one or more Subscribers. Equity 7, 

Section 147(d)(1). ‘‘External Distributors’’ are 

Distributors that receive Nasdaq Basic data and then 

distribute that data to one or more Subscribers 

outside the Distributor’s own entity. Equity 7, 

Section 147(d)(1)(B). 

6The Exchange expects most purchasers of the 

proposed license to distribute last sale transaction 

reports and best bid and offer information. Firms 

will have the discretion, however, to distribute less 

than the full set of information available—for 

example, some firms may distribute last sale 

information only—or to distribute all of the 

information available on Nasdaq Basic. 

7 ‘‘Display Usage’’ means any method of accessing 

Nasdaq Basic data that involves the display of such 

data on a screen or other visualization mechanism 

for access or use by a natural person or persons. 

Equity 7, Section 147(d)(2). 8The proposed license will not cover the 

Distributor Fee for Nasdaq Basic set forth in Equity 

7, Section 147(c)(1). 

9The Exchange proposes to define a ‘‘User’’ as ‘‘a 

natural person who has access to Exchange 

information.’’ Equity 7, Section 147(d)(7). 

10A ‘‘Hosted Display Solution’’ is a product, 

solution or capability provided by a Distributor in 

which the Distributor makes available Nasdaq data 

or Derived Data to an application branded or cobranded with the third-party brand for use by 

external subscribers of the third-party entity or 

Distributor. The Distributor maintains control of the 

data, entitlements and display of the product, 

solution or capability. Hosted Display Solutions 

include, but are not limited to: (1) ‘‘Widgets’’ (such 

as an iframe, applet, or other solution), in which the 

Hosted Display Solution is a part or a subset of a 

website or platform hosted or maintained by the 

third-party entity; and (2) ‘‘White Labels,’’ in which 

the Distributor hosts or maintains the website or 

platform on behalf of the third-party entity. Equity 

7, Section 147(d)(5). 

11 ‘‘Derived Data’’ is pricing data or other 

information that is created in whole or in part from 

Nasdaq information; it cannot be reverse engineered 

to recreate Nasdaq information, or be used to create 

other data that is recognizable as a reasonable 

substitute for Nasdaq information. Equity 7, Section 

147(d)(6). 

12A ‘‘Non-Professional Subscriber’’ is a natural 

person who is not: (A) Registered or qualified in 

any capacity with the Securities and Exchange 

Commission, the Commodity Futures Trading 

Commission, any state securities agency, any 

securities exchange or association, or any 

commodities or futures contract market or 

association; (B) engaged as an ‘investment adviser’ 

as that term is defined in Section 202(a)(11) of the 

Investment Advisers Act of 1940 (whether or not 

registered or qualified under that Act); or (C) 

employed by a bank or other organization exempt 

from registration under federal or state securities 

laws to perform functions that would require 

registration or qualification if such functions were 

performed for an organization not so exempt. Equity 

7, Section 147(d)(4)(A). 

13A ‘‘Professional Subscriber’’ is any Subscriber 

other than a Non-Professional Subscriber. Equity 7, 

Section 147(d)(4)(B). 

14Securities Exchange Act Release No. 34–82723 

(February 15, 2018), 83 FR 7812 (February 22, 2018) 

(SR–NASDAQ–2018–010) (discussing when a 

distributor of NLS has ‘‘no reason to believe’’ that 

it is being used by Professionals acting in their 

professional capacity). 

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 purpose of the Proposal is to 

create a monthly Media Enterprise 

License for the distribution of Nasdaq 

Basic to the general investing public for 

Display Usage.3

Nasdaq Basic 

Nasdaq Basic is a real-time market 

data product that offers best bid and 

offer and last sale information for all 

U.S. exchange-listed securities based on 

liquidity within the Nasdaq market 

center and trades reported to the 

FINRA/Nasdaq Trade Reporting 

Facilities at Chicago and Carteret 

(‘‘TRFs’’). It is a subset of the core 

quotation and last sale data provided by 

securities information processors 

(‘‘SIPs’’), which distribute consolidated 

data pursuant to the CTA/CQ Plan and 

the UTP Plan. 

Nasdaq Basic is separated into three 

components, which may be purchased 

individually or in combination: (i) 

Nasdaq Basic for Nasdaq, which 

contains the best bid and offer on the 

Nasdaq Market Center and last sale 

transaction reports for Nasdaq and the 

FINRA/Nasdaq TRFs for Nasdaq-listed 

stocks; (ii) Nasdaq Basic for NYSE, 

which covers NYSE-listed stocks, and 

(iii) Nasdaq Basic for NYSE American, 

which provides data on stocks listed on 

NYSE American and other listing 

venues that disseminate quotes and 

trade reports on Tape B. The specific 

data elements available through Nasdaq 

Basic are: (i) Nasdaq Basic Quotes 

(‘‘QBBO’’), the best bid and offer and 

associated size available in the Nasdaq 

Market Center, as well as last sale 

transaction reports; 4 (ii) Nasdaq 

opening and closing prices, as well as 

IPO and trading halt cross prices; and 

(iii) general exchange information, 

including systems status reports, trading 

halt information, and a stock directory. 

Proposed Changes 

Media Enterprise License 

Nasdaq proposes to introduce a Media 

Enterprise License that will allow any 

External Distributor 5 to disseminate 

Nasdaq Basic, or any subset thereof,6 to 

the general investing public for Display 

Usage 7 for a monthly fee of $100,000.8

Information may be distributed via 

television, websites, mobile devices, or 

any other unrestricted means of 

transmission to an unlimited number of 

Users.9 A Hosted Display Solution 10

may be used to distribute data under 

this license, provided that the External 

Distributor purchases a separate Media 

Enterprise License for each such Hosted 

Display Solution. 

Distribution of Nasdaq Basic through 

the Media Enterprise License will be 

subject to two primary restrictions. 

First, distribution of Derived Data 11 is 

not permitted. The purpose of the 

license is to disseminate accurate 

market information to the general 

investing public. Derived Data—which 

cannot be reverse engineered to recreate 

Nasdaq information, or be used to create 

other data that is recognizable as a 

reasonable substitute for Nasdaq 

information—does not serve that 

purpose. 

Second, data may only be used for 

informational and non-trading purposes. 

Nasdaq Basic information may only be 

distributed on platforms pre-approved 

by the Exchange as providing a 

reasonable basis to conclude that all 

Users of such Information are either 

Non-Professionals 12 or Professionals 13

whom the Distributor has no reason to 

believe are using Nasdaq Basic in their 

professional capacity. A Distributor has 

‘‘no reason to believe’’ that Nasdaq 

Basic is being used in a professional 

capacity when, for example, the data is 

made available to the general investing 

public in a format that would be 

‘‘unlikely to be of significant use to 

Professionals acting in a professional 

capacity.’’ 14

The proposed Media Enterprise 

License does not cover the Distributor 

Fee for Nasdaq Basic set forth in 

subparagraph (c)(1). 

Extension to Broker-Dealer Enterprise 

Licenses 

Nasdaq also proposes to provide the 

Media Enterprise License at no 

additional cost to broker-dealers that 

purchase either of the following two 

enterprise licenses: (i) The license to 

distribute Nasdaq Basic to natural 

persons in a brokerage relationship with 


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Federal Register / Vol. 87, No. 57 / Thursday, March 24, 2022 / Notices 16813 

15Equity 7 Section 147(b)(5). 

16NLS provides real-time last sale information for 

executions occurring within the Nasdaq market 

center and trades reported to the jointly-operated 

FINRA/Nasdaq TRFs. The NLS data feed, which 

provides price, volume and time of execution data 

for last sale transactions, includes transaction 

information for Nasdaq-listed stocks (‘‘NLS for 

Nasdaq’’) and for stocks listed on NYSE, NYSE 

American, and other Tape B listing venues (‘‘NLS 

for NYSE/NYSE American’’). It is, like Nasdaq 

Basic, a non-core product that provides a subset of 

the core data provided by the SIPs under the CTA 

and UTP plans. See, e.g., Securities Exchange Act 

Release No. 91874 (May 12, 2021), 86 FR 26985 

(May 18, 2021) (SR–Nasdaq–2021–036). 

17The Nasdaq Basic enterprise license also 

includes a number of other provisions and 

restrictions, including but not limited to: (i) A 

limitation that the use of the data by a Professional 

Subscriber shall be limited to the brokerage 

relationship, except that Nasdaq Basic data may be 

made available for up to 4,500 internal Subscribers 

without incurring additional fees; (ii) a requirement 

for a separate enterprise license for each discrete 

electronic system; (iii) a requirement that the 

broker-dealer pay distributor fees under paragraph 

(c)(1); and (iv) a requirement that the broker-dealer 

report the number of Subscribers receiving Nasdaq 

Basic under this license. Equity 7, Section 147(b)(5). 

18 In addition, Nasdaq proposes to correct current 

references to ‘‘NYSE MKT,’’ which no longer exists, 

to ‘‘NYSE American,’’ and revise numbering to 

accommodate the addition of new Subsection 

147(b)(6). 

19See, e.g., Securities Exchange Act Release No. 

79699 (December 28, 2016), 82 FR 892 (January 4, 

2017) (SR–BatsEDGA–2016–32) (introducing the 

digital media license for Bats EDGA); see also Cboe 

One Feed, Digital Media License, available at 

https://www.cboe.com/us/equities/market_data_

services/cboe_one/(allowing general news websites 

to distribute real-time quote and trade information 

on open public websites and applications; 

information may be distributed via television, 

websites and mobile devices for informational and 

non-trading purposes only). 

20Professionals are also subject to regulatory 

requirements not applicable to the general investing 

public that require different sets of information to 

be displayed. SEC Rule 603(c), for example, 

requires Professionals to provide consolidated 

information, rather than proprietary data, under 

certain circumstances. See 17 CFR 242.603(c). 

the broker-dealer at Equity 7, Section 

147(b)(5); or (ii) the Market Data 

Enterprise License for Display Usage at 

Equity 7, Section 132. All of the terms 

and conditions set forth in Equity 7, 

Section 147(b)(6) will apply to any 

broker-dealer obtaining the license 

pursuant to either of these subsections. 

The enterprise license at Equity 7, 

Section 147(b)(5), allows a broker-dealer 

to distribute Nasdaq Basic, or Derived 

Data therefrom, through any electronic 

system approved by Nasdaq, to an 

unlimited number of Professional and 

Non-Professional Subscribers who are 

natural persons and with whom the 

broker-dealer has a brokerage 

relationship for a monthly fee of 

$100,000.15 That license currently 

includes the right to distribute Nasdaq 

Last Sale (‘‘NLS’’) 16 data to the general 

investing public for Display Usage 

without paying the fees set forth in 

Equity 7, Section 139(b), subject to all 

of the provisions set forth therein, 

excluding those related to the payment 

of fees.17

Nasdaq proposes to add a reference to 

the Media Enterprise License to Equity 

7, Section 147(b)(5). If a customer 

chooses to continue to distribute NLS it 

may do so without change. 

The Market Data Enterprise License 

for Display Usage at Equity 7, Section 

132, allows a Distributor that is also a 

broker-dealer or an investment adviser 

to distribute, for Display Usage only, 

Depth-of-Book data and Nasdaq Basic to 

an unlimited number of internal and 

external recipients, to be used only in 

the context of a brokerage relationship 

with a broker-dealer or an engagement 

with an Investment Adviser. The license 

currently allows unlimited external 

distribution of NLS and NLS Plus 

through one of the mechanisms for the 

general investing public identified at 

Equity 7, Section 139(b), provided that 

platforms distributing such information 

are pre-approved by the Exchange as 

reasonably designed to meet the 

requirements with respect to each of the 

products identified. This license may be 

purchased for a monthly fee of 

$600,000, or the Distributor may 

purchase a full twelve months of the 

license in advance for a monthly fee of 

$500,000. 

The Exchange proposes to add a 

reference to Nasdaq Basic for the Market 

Data Enterprise License. If the purchaser 

wishes to continue to distribute NLS 

after the Proposal, it may do so without 

change. 

Extension to Short Interest Report 

Nasdaq distributes a Short Interest 

Report under a fee schedule set forth at 

Equity 7, Section 122(c). Distributors 

that currently purchase enterprise 

licenses at Equity 7, Section 123(c)(3) or 

Equity 7, Section 147(b)(5), or that 

expend $5,000 or more on any product 

offered at Equity 7, Section 139 in a 

particular month, excluding distributor 

fees at Equity 7, Section 139(c), may 

distribute the Short Interest Report to an 

unlimited number of external 

Subscribers, or on an open website, for 

$1,500 per month. The Exchange 

proposes to add the Media Enterprise 

License at Equity 7, Section 147(b)(6) to 

the list of licenses which will allow 

distribution of the Short Interest Report 

to an unlimited number of external 

Subscribers or on an open website for 

$1,500 per month.18

Discussion 

This Proposal is a response to 

customer requests. A number of firms, 

including financial media firms, mobile 

application vendors, and data vendors, 

have informed Nasdaq that they have 

observed an increase in demand for bid 

and offer information from the general 

investing public, and requested that 

Nasdaq create the proposed enterprise 

license. These potential customers 

compared Nasdaq’s market data fee 

schedule to that of one of its 

competitors, which already allows 

general news websites to distribute realtime quote and trade information on 

open public websites and 

applications,19 and concluded that 

overall market transparency would be 

improved if Nasdaq Basic Quotes were 

distributed on open public websites and 

applications as well. 

Upon consideration of these requests, 

Nasdaq has determined that distribution 

of best bid and offer information is in 

the best interest of our customers and 

the market as a whole. When NLS was 

introduced in 2007, it was a significant 

leap forward for Retail Investors. NLS 

allowed, for the first time, a costeffective method for the retail audience 

to gain insights into the real time price 

movements of US securities on open 

websites. The release of pre-trade 

information on a similar basis is the 

next step in expanding the availability 

and accessibility of accurate and reliable 

trading information, increasing overall 

transparency. 

Nasdaq believes that there is little risk 

that the proposed license will change 

the way that Professionals use pre-trade 

data. Although the new license may 

occasionally result in incidental 

professional use, data that is generally 

available to online customers via 

television, open websites, mobile 

devices, or any other unrestricted means 

of transmission is unlikely to have the 

breadth or depth of information, or 

desktop applications, used by 

professionals. Information for 

professional use is typically distributed 

through firewall-protected websites, 

intranet sites, secured terminals, or is 

otherwise protected from widespread 

dissemination.20 As an additional 

safeguard, Nasdaq proposes that any 

platform used to distribute data under 

this license contain sufficient controls 

to ensure that the feeds cannot be 

modified into a data feed or otherwise 

made suitable for professional use. 

The Exchange expects the new license 

to be attractive to financial media 

outlets, search engines and firms 

engaged in the development and sale of 

new financial applications. Based on 

Nasdaq’s familiarity with the market, it 


khammond on DSKJM1Z7X2PROD with NOTICES
16814 Federal Register / Vol. 87, No. 57 / Thursday, March 24, 2022 / Notices 

21See Cboe One Feed, Digital Media License, 

available at https://www.cboe.com/us/equities/ 

market_data_services/cboe_one/ (allowing general 

news websites to distribute real-time quote and 

trade information on open public websites and 

applications; information may be distributed via 

television, websites and mobile devices for 

informational and non-trading purposes only). 

22See 15 U.S.C. 78f(b). 

23See 15 U.S.C. 78f(b)(4) and (5). 

24The decision of the United States Court of 

Appeals for the District of Columbia Circuit in 

NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010) 

upheld the Commission’s reliance upon 

competitive markets to set reasonable and equitably 

allocated fees for market data. ‘‘In fact, the 

legislative history indicates that the Congress 

intended that the market system evolve through the 

interplay of competitive forces as unnecessary 

regulatory restrictions are removed and that the SEC 

wield its regulatory power in those situations where 

competition may not be sufficient, such as in the 

creation of a consolidated transactional reporting 

system.’’ NetCoalition I, at 535 (quoting H.R. Rep. 

No. 94–229, at 92 (1975), as reprinted in 1975 

U.S.C.C.A.N. 321, 323) (internal quotation marks 

omitted). The court agreed with the Commission’s 

conclusion that ‘‘Congress intended that 

competitive forces should dictate the services and 

practices that constitute the U.S. national market 

system for trading equity securities.’’ Id. (quoting 

Securities Exchange Act Release No. 59039 

(December 2, 2008), 73 FR 74770, 74,771 (December 

9, 2008) (SR–NYSEArca–2006–21)). 

25See Securities Exchange Act Release No. 59039 

(December 2, 2008), 73 FR 74770 (December 9, 

2008) (SR–NYSEArca–2006–21). 

26 Id. 

27See New York Stock Exchange, NYSE Best 

Quote & Trades (BQT), available at https://

www.nyse.com/market-data/real-time/nyse-bqt. 

28See Cboe Market Data Services, U.S. Equities, 

U.S. Equities Market Data Products, available at: 

https://markets.cboe.com/us/equities/market_data_

services/#:∼:text=Cboe%20Top%20is%20a%20real,

time%20on%20a%20Cboe%20book.&text=It%20

is%20a%20real%2Dtime,time%20

on%20a%20Cboe%20book. 

29See New York Stock Exchange, NYSE Best 

Quote & Trades (BQT), available at https://

www.nyse.com/market-data/real-time/nyse-bqt. 

30See Cboe, Market Data Services, Cboe One 

Feed, available at https://markets.cboe.com/us/ 

equities/market_data_services/cboe_one/. 

31See NetCoalition v. SEC, 615 F.3d 525, 539 

(D.C. Cir. 2010) (quoting Securities Exchange Act 

Release No. 59039 (December 2, 2008), 73 FR 

74770, 74782–83 (December 9, 2008) (SR– 

NYSEArca–2006–21)). 

32See, e.g., Securities Exchange Act Release No. 

79699 (December 28, 2016), 82 FR 892 (January 4, 

2017) (SR–BatsEDGA–2016–32) (introducing the 

digital media license for Bats EDGA); see also Cboe 

One Feed, Digital Media License, available at 

https://www.cboe.com/us/equities/market_data_

services/cboe_one/ (allowing general news websites 

to distribute real-time quote and trade information 

on open public websites and applications; 

information may be distributed via television, 

websites and mobile devices for informational and 

non-trading purposes only). 

also believes that broker-dealers that 

currently distribute last sale transaction 

reports to the general investing public 

would similarly be interested in 

distributing QBBO information on their 

open websites to generate traffic and 

attract customers. 

Any firm that is interested in 

distributing Nasdaq Basic to the general 

investing public under the conditions 

set forth in the proposed rule would be 

able to do so. The Exchange expects 

financial media firms, firms engaged in 

the development and sale of new 

financial applications, broker-dealers, 

and data vendors in particular to benefit 

from the proposed license. The Proposal 

will promote competition as it is similar 

to a media license already offered by 

another exchange.21

2. Statutory Basis 

The Exchange believes that its 

Proposal is consistent with Section 6(b) 

of the Act,22 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,23 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, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Proposal Is an Equitable Allocation 

of Reasonable Dues, Fees and Other 

Charges 

As the Commission and courts 24 have 

recognized, ‘‘[i]f competitive forces are 

operative, the self-interest of the 

exchanges themselves will work 

powerfully to constrain unreasonable or 

unfair behavior.’’ 25 Accordingly, ‘‘the 

existence of significant competition 

provides a substantial basis for finding 

that the terms of an exchange’s fee 

proposal are equitable, fair, reasonable, 

and not unreasonably or unfairly 

discriminatory.’’ 26 Competition among 

exchanges in the sale of top-of-book data 

is a powerful competitive force that 

constrains the price of top-of-book data 

products. 

Nasdaq Basic provides choices to 

broker-dealers and other data consumers 

by offering less than the quantum of 

data provided through the consolidated 

tape feeds, but at a lower price. All of 

the top-of-book proprietary products 

offered by the exchanges are readily 

substitutable for each other. 

Top-of-book data can be used for 

many purposes—from a retail investor 

casually surveying the market to 

sophisticated market participants using 

it for a variety of applications, such as 

investment analysis, risk management, 

or portfolio valuation. 

All major exchange groups compete to 

sell top-of-book data. Nasdaq Basic 

provides data derived from liquidity 

within the Nasdaq market center and 

trades reported to the FINRA/Nasdaq 

TRFs. The NYSE BQT feed disseminates 

top-of-book information from the NYSE, 

NYSE American, NYSE Arca, NYSE 

National and NYSE Chicago 

exchanges.27 The Cboe One Summary 

Feed provides data from the four Cboe 

equities exchanges: BZX Exchange, BYX 

Exchange, EDGX Exchange and EDGA 

Exchange.28

Nasdaq, NYSE and Cboe compete on 

price and quality. Like Nasdaq, both 

NYSE 29 and Cboe 30 offer enterprise 

licenses for their top-of book feeds. All 

of these top-of-book data feeds are 

substitutes. The value of the data 

depends on its quality, which is in large 

part determined by the amount of order 

flow attracted by the exchange—the 

more order flow, the more quotes and 

trades, and the better the exchange data 

will be able to match the NBBO. 

Competition among exchanges for 

order flow has long been recognized by 

the courts. As the D.C. Circuit stated in 

NetCoalition v. Securities and Exchange 

Commission, ‘‘[n]o one disputes that 

competition for order flow is ‘fierce.’ 

. . . ‘In the U.S. national market system, 

buyers and sellers of securities, and the 

broker-dealers that act as their orderrouting agents, have a wide range of 

choices of where to route orders for 

execution’; [and] ‘no exchange can 

afford to take its market share 

percentages for granted’ because ‘no 

exchange possesses a monopoly, 

regulatory or otherwise, in the execution 

of order flow from broker dealers’ 

. . . .’’ 31

The proposed Media Enterprise 

License is an element of the competition 

among exchanges for the sale of top-ofbook feeds. As explained above, it was 

drafted in response to requests from 

potential customers, including financial 

media firms, mobile application 

vendors, and data vendors, and also as 

a response to the license offered by one 

of Nasdaq’s competitors allowing 

general news websites to distribute realtime quote and trade information.32 The 

Exchange expects the new license to be 

attractive to financial media outlets, 

search engines, and firms engaged in the 

development and sale of new financial 

applications, as well as broker-dealers, 

and expects that the increased 

dissemination of Nasdaq data will 

enhance Nasdaq’s ability to compete 

with other exchanges in the sale of topof-book data. 

In addition to the new Media 

Enterprise License, Nasdaq proposes to 

expand the broker-dealer enterprise 

license at Equity 7, Section 147(b)(5), 

and the Market Data Enterprise License 

for Display Usage at Equity 7, Section 

132, to include the Media Enterprise 

License at no additional cost. The 

Exchange also proposes to add the 

Media Enterprise License at Equity 7, 


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Federal Register / Vol. 87, No. 57 / Thursday, March 24, 2022 / Notices 16815 

33 15 U.S.C. 78s(b)(3)(A)(ii). 

Section 147(b)(6) to the list of licenses 

which will allow distribution of the 

Short Interest Report to an unlimited 

number of external Subscribers or on an 

open website for a monthly fee. All of 

these changes will expand existing 

services at no additional cost to the 

purchaser. 

The fact that the new Media 

Enterprise License is subject to 

competition provides a substantial basis 

for a finding that the terms of the 

proposal are equitable, fair, and 

reasonable. 

The Proposal Does Not Permit Unfair 

Discrimination 

The Proposal is not unfairly 

discriminatory. The proposed license 

will be available to any External 

Distributor to disseminate Nasdaq Basic 

to the general investing public for 

Display Usage. Broker-dealers that 

purchase the enterprise licenses at 

Equity 7, Sections 147(b)(5) and 132 

will be able to distribute the same data 

to the general investing public at no 

additional charge, beyond the fees for 

the underlying licenses, and, as 

discussed above, these broker-dealers 

may continue to distribute NLS as they 

did before this change. Any firm that is 

interested in distributing Nasdaq Basic 

to the general investing public under the 

conditions set forth in the proposed rule 

would be able to do so on a nondiscriminatory basis. 

With respect to the Short Interest 

Report at Equity 7, Section 122(c), there 

is no unfair discrimination in allowing 

customers another means to qualify for 

purchase of the Short Interest Report for 

a reduced fee. 

For all of the reasons set forth herein, 

the proposed Media Enterprise License 

will be subject to significant 

competition, and that competition will 

ensure that there is no unfair 

discrimination. The Proposal will also 

benefit the general investing public by 

lowering the cost of distributing Nasdaq 

Basic, thereby enhancing overall market 

transparency. 

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. With respect 

to inter-market competition—the 

competition among SROs—the 

Exchange’s ability to price market data 

products is constrained by competition 

among exchanges for top-of-book data. 

The proposed Media Enterprise License 

is itself a response to a similar product 

offered by another exchange, and other 

exchanges are free to follow Nasdaq in 

offering their own version of the 

product. With respect to intra-market 

competition—the competition among 

consumers of exchange data—the 

Exchange expects the Proposal to 

promote competition by making Nasdaq 

Basic freely available to any External 

Distributor willing to distribute it to the 

general investing public under the terms 

set forth in this license. 

Intermarket Competition 

As discussed in detail under Statutory 

Basis, Nasdaq competes with other 

exchanges in the sale of top-of-book 

products. 

Nasdaq is offering the proposed 

Media Enterprise License to gain new 

customers and to compete with a similar 

product offered by another exchange. 

The Proposal will not cause any 

unnecessary or inappropriate burden on 

intermarket competition, as other 

exchanges are free to respond with a 

similar license of their own. 

Intramarket Competition 

The Proposal will not cause any 

unnecessary or inappropriate burden on 

intramarket competition. Indeed, it will 

foster competition by providing External 

Distributors—including financial media 

firms, search engines, vendors, and 

broker-dealers—with more options to 

deliver top-of-book information to the 

general investing public. The Proposal 

will also promote competition by 

increasing market transparency through 

greater dissemination of QBBO 

information to the general investing 

public. The license is available to all 

market participants that meet the terms 

set forth in the license, and nothing in 

the Proposal will place any unnecessary 

or inappropriate burden on intramarket 

competition. 

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.33

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) 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 rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2022–024 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2022–024. 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 website (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 website 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. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NASDAQ–2022–024 and 


khammond on DSKJM1Z7X2PROD with NOTICES
16816 Federal Register / Vol. 87, No. 57 / Thursday, March 24, 2022 / Notices 

34 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 ‘‘Select Symbols’’ are options overlying all 

symbols listed on the Exchange that are in the 

Penny Interval Program. 

4 ‘‘Non-Select Symbols’’ are options overlying all 

symbols excluding Select Symbols. 

5The term ‘‘Market Makers’’ refers to Competitive 

Market Makers and Primary Market Makers, 

collectively. 

should be submitted on or before April 

14, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–06187 Filed 3–23–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94468; File No. SR–ISE– 

2022–07] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the 

Qualifications for the Market Maker 

Plus Program in Options 7, Section 3 

March 18, 2022. 

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 4, 

2022, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the 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 

The Exchange proposes to amend the 

qualifications for the Exchange’s Market 

Maker Plus program in its Pricing 

Schedule at Options 7, Section 3. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/ise/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend the qualifications for 

the Exchange’s Market Maker Plus 

program in its Pricing Schedule at 

Options 7, Section 3. The Exchange 

initially filed the proposed pricing 

changes on February 23, 2022 (SR–ISE– 

2022–05). On March 4, 2022, the 

Exchange withdrew that filing and 

submitted this filing. 

Today, the Exchange operates a 

Market Maker Plus program for regular 

orders in Select Symbols 3 and NonSelect Symbols 4 that provides the 

below tiered incentives to Market 

Makers 5 based on time spent quoting at 

the National Best Bid or National Best 

Offer (‘‘NBBO’’). This program is 

designed to reward Market Makers that 

contribute to market quality by 

maintaining tight markets in Select and 

Non-Select Symbols. 

SELECT SYMBOLS OTHER THAN SPY, QQQ, IWM, AMZN, FB, AND NVDA 

Market Maker Plus tier 

(specified percentage) Maker rebate 

Tier 1 (80% to less than 85%) ............................................................................................................................................................ ($0.15) 

Tier 2 (85% to less than 95%) ............................................................................................................................................................ (0.18) 

Tier 3 (95% or greater) ........................................................................................................................................................................ (0.22) 

SPY, QQQ, AND IWM 

Market Maker Plus tier 

(specified percentage) 

Regular Maker 

rebate 

Linked Maker 

rebate 

Tier 1a (50% to less than 65%) .............................................................................................................................. ($0.00) N/A 

Tier 1b (65% to less than 80%) or (over 50% and adds liquidity in the qualifying symbol that is executed at a 

volume of greater than 0.10% of Customer Total Consolidated Volume) .......................................................... (0.05) N/A 

Tier 2 (80% to less than 85%) or (over 50% and adds liquidity in the qualifying symbol that is executed at a 

volume of greater than 0.20% of Customer Total Consolidated Volume) .......................................................... (0.18) ($0.15) 

Tier 3 (85% to less than 90%) or (over 50% and adds liquidity in the qualifying symbol that is executed at a 

volume of greater than 0.25% of Customer Total Consolidated Volume) .......................................................... (0.22) (0.19) 

Tier 4 (90% or greater) or (over 50% and adds liquidity in the qualifying symbol that is executed at a volume 

of greater than 0.50% of Customer Total Consolidated Volume) ....................................................................... (0.26) (0.23) 

AMZN, FB, AND NVDA 

Market Maker Plus tier 

(specified percentage) Maker rebate 

Tier 1 (70% to less than 85%) ............................................................................................................................................................ ($0.15) 

Tier 2 (85% to less than 95%) ............................................................................................................................................................ (0.18) 


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