Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices 16903 

17 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). 

5As is currently the case with respect to reduced 

pricing tiers, orders that do not attempt to execute 

in the Nasdaq Market Center for the full size of the 

order prior to routing are not counted in 

determining shares of liquidity routed. 

6The fee remains 0.3% of the total transaction 

cost in the case of securities priced at less than $1 

per share. 

7SR–BX–2009–018 (March 25, 2009). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–8326 Filed 4–10–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59706; File No. SR– 

NASDAQ–2009–029] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify Fees 

for Members Using the NASDAQ 

Market Center 

April 6, 2009. 

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 25, 

2009, 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. Pursuant to 

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

Rule 19b–4(f)(2) thereunder,4 NASDAQ 

has designated this proposal as 

establishing or changing a due, fee, or 

other charge, which renders the 

proposed rule change effective upon 

filing. 

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 pricing 

for NASDAQ members using the Nasdaq 

Market Center. NASDAQ will 

implement this rule change on April 1, 

2009. The text of the proposed rule 

change is available at http:// 

nasdaqomx.cchwallstreet.com/, at 

NASDAQ’s principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

NASDAQ included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. 

NASDAQ has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NASDAQ is proposing to modify its 

pricing for order execution and routing. 

As detailed below, the effect of the fee 

changes varies with respect to the listing 

venue of the securities being traded and 

whether a member is accessing or 

providing liquidity or routing an order. 

Execution of Orders for Securities Listed 

on NASDAQ or the New York Stock 

Exchange (‘‘NYSE’’); Routing of Orders 

for Securities Listed on NASDAQ or 

NYSE to Venues Other Than NYSE; 

Routing of Orders for Exchange-Traded 

Funds (‘‘ETFs’’) to NYSE 

NASDAQ is reducing fees to access 

liquidity in securities listed on 

NASDAQ and NYSE by reducing the 

levels of market activity at which 

members qualify for reduced pricing 

and by reducing the fees charged to 

these qualifying members. Specifically, 

NASDAQ is introducing a new pricing 

tier for members with an average daily 

volume through the Nasdaq Market 

Center in all securities of (i) more than 

50 million shares of liquidity provided, 

and (ii) more than 60 million shares of 

liquidity accessed and/or routed.5

Members qualifying for this tier will pay 

$0.0026 per share executed when 

accessing liquidity (or 0.1% of the total 

transaction cost in the case of 

executions of securities priced at less 

than $1 per share). A second pricing tier 

will apply to members with an average 

daily volume through the Nasdaq 

Market Center in all securities of (i) 

more than 25 million shares of liquidity 

provided, and (ii) more than 40 million 

shares of liquidity accessed and/or 

routed. Members qualifying for this tier 

will pay $0.0028 per share executed 

when accessing liquidity (or 0.1% of the 

total transaction cost in the case of 

executions at less than $1 per share). By 

contrast, under the current pricing 

schedule, a member must have an 

average daily volume of (i) more than 35 

million shares of liquidity provided and 

(ii) more than 55 million shares of 

liquidity accessed and/or routed in 

order to qualify for a fee to access 

liquidity of $0.0029. Thus, under the 

change, favorable pricing becomes 

available at lower levels of liquidity 

provision (25 million shares versus 35 

million shares) and routing and/or 

accessing (40 million shares versus 55 

million shares), and the reduced fees are 

themselves lower ($0.0026 or $0.0028 

per share executed, versus $0.0029 per 

share executed). However, in order to 

simplify its schedule, NASDAQ is 

eliminating a reduced fee of $0.00295 

per share executed for members that 

access a daily average of more than 55 

million shares of liquidity during a 

month but that do not otherwise qualify 

for a lower rate. As is currently the case, 

members not qualifying for a reduced 

pricing tier will pay $0.0030 per share 

executed to access liquidity (or 0.1% of 

the total transaction cost in the case of 

executions at less than $1 per share). 

NASDAQ is also instituting changes 

with respect to fees for routing orders 

that attempt to execute in the Nasdaq 

Market Center for the full size of the 

order before routing. These routing 

changes apply to orders in NASDAQlisted securities, orders in NYSE-listed 

securities routed to venues other than 

NYSE, and routing of orders for ETFs to 

NYSE. With respect to such activity, 

NASDAQ is eliminating volume-based 

tiers, with fees that currently range from 

$0.0029 to $0.003, and instituting a 

lower fee of $0.0026 available to all 

members.6 Fees for routing orders that 

do not check the Nasdaq Market Center 

for the full size of the order before 

routing remain unchanged, except with 

respect to orders in securities that are 

priced at $1 or more per share and listed 

on NASDAQ or NYSE, where the order 

is directed to NASDAQ OMX BX 

(‘‘BX’’). For securities listed on 

NASDAQ or NYSE, BX is replacing its 

fee to access liquidity with a credit of 

$0.0006.7 Because that credit is 

designed to encourage direct use of BX 

by its members, NASDAQ will not be 

passing on the credit to NASDAQ 

members that use its routing facility to 

access BX. Nevertheless, NASDAQ 

believes that the change in BX pricing 

warrants eliminating the fee for routing 

orders to BX in circumstances where 

NASDAQ members choose to direct 

orders to BX. Similarly, NASDAQ is 

16904 Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices 

8All credits described relate to executions of 

securities priced at $1 or more per share. Both 

before and after implementation of the proposed 

rule change, the credit with respect to executions 

of securities priced at less than $1 per share is $0. 

9For securities priced under $1, the fee to access 

liquidity remains 0.1% of the total transaction cost, 

and the fee to route remains 0.3% of the total 

transaction cost. 

10 In all cases, no credit is paid with respect to 

securities priced at less than $1 per share. 

11SR–BX–2009–018 (March 25, 2009). 

12The fee is $0.0020 for Intermarket Sweep 

Orders and for orders that attempt to execute solely 

against displayed interest prior to routing. Orders 

that attempt to execute for the full size of the order 

prior to routing pay $0.0018 per share if they access 

liquidity at NYSE or receive a credit for $0.0010 per 

share if they add liquidity at NYSE. 

13Securities Exchange Act Release No. 59483 

(March 2, 2009), 74 FR 10328 (March 10, 2009) (SR– 

NYSE–2009–22). 

eliminating the fee to route orders to BX 

if the orders check the Nasdaq Market 

Center book for the full size of the order 

prior to routing but are designated by 

the market participant as not eligible for 

posting to the Nasdaq Market Center 

book after routing. This would occur in 

circumstances where a market 

participant wishes to route an order to 

NYSE or NYSEAlternext for posting but 

specifies that the order should check the 

Nasdaq Market Center and BX books 

before being routed to the destination 

market. 

To offset the reduction in fees to 

access and route liquidity, NASDAQ is 

decreasing the overall credits it pays to 

liquidity providers. Currently, members 

qualify for the most favorable credit tier 

if they provide an average daily volume 

during the month of more than 35 

million shares of liquidity: members in 

this tier receive $0.0015 per share of 

liquidity provided in the case of nondisplayed quotes/orders, and $0.0028 

per share of liquidity provided in the 

case of displayed quotes/orders.8 Under 

the revised fees, a member must provide 

more than 50 million shares of liquidity 

to qualify for the most favorable pricing 

tier, and the credit for displayed 

liquidity will be reduced to $0.0025 per 

share, with the credit for non-displayed 

liquidity remaining at $0.0015 per 

share. The next most favorable tier 

currently requires providing more than 

20 million shares of liquidity: the credit 

for non-displayed liquidity is $0.001 per 

share, and the credit for displayed 

liquidity is $0.0025. Under the revised 

pricing schedule, a member must 

provide a daily average of more than 25 

million shares of liquidity, and the 

credit for displayed liquidity will be 

reduced to $0.0022 per share, with the 

credit for non-displayed liquidity 

remaining $0.001 per share. Members 

not qualifying for these pricing tiers will 

continue to receive $0.001 per share for 

non-displayed liquidity and $0.002 per 

share for displayed liquidity. 

Finally, NASDAQ is deleting obsolete 

fee language regarding a surcharge for 

orders routed to the American Stock 

Exchange and charged a fee by the 

specialist. Specialists at NYSEAlternext 

(formerly the American Stock Exchange) 

no longer charge this fee. 

Execution and Routing of Orders for 

Securities Listed on Exchanges Other 

Than NASDAQ or NYSE 

With respect to securities listed on 

exchanges other than NASDAQ or 

NYSE, NASDAQ is modifying the levels 

of activity required to qualify for 

favorable pricing tiers, but is not 

modifying the level of charges and 

credits associated with tiers. Thus, in 

order to qualify for the most favorable 

fee to access and route liquidity, a 

member must (i) provide more than 50 

million shares of liquidity (currently 35 

million) and (ii) access or route more 

than 60 million shares of liquidity 

(currently 55 million). Members 

qualifying for this tier currently pay 

$0.0029 per share executed to access 

liquidity or to route after attempting to 

execute for the full size of the order, and 

this fee will remain unchanged.9 As is 

the case with executions of NASDAQand NYSE-listed securities, NASDAQ is 

eliminating a reduced fee of $0.00295 

per share executed for members that 

access a daily average of more than 55 

million shares of liquidity during a 

month. Members not qualifying for a 

reduced pricing tier will continue to pay 

$0.0030 per share executed to access 

liquidity and to route after checking the 

Nasdaq Market Center book for the full 

size of the order. 

The level of credits for providing 

liquidity to support executions of 

securities listed on exchanges other than 

NASDAQ and NYSE will remain 

unchanged, but the volume levels 

required to qualify for favorable credits 

will increase. Thus, in order to qualify 

for the most favorable credit, a member 

must provide an average daily volume 

of more than 50 million shares of 

liquidity (currently 35 million): the 

most favorable credit will remain 

$0.0015 for non-displayed liquidity and 

$0.0028 for displayed liquidity. To 

qualify for the next most favorable 

credit, a member must provide a daily 

average volume of more than 25 million 

shares of liquidity (currently 20 

million): members is this tier receive 

$0.001 per share for non-displayed 

liquidity and $0.0025 per share for 

displayed liquidity. Other members will 

continue to receive $0.001 per share for 

non-displayed liquidity and $0.002 per 

share for displayed liquidity.10

Because BX is maintaining a fee of 

$0.0014 per share executed for orders 

that access liquidity in securities listed 

on exchanges other than NASDAQ and 

NYSE,11 NASDAQ is maintaining its 

current fee of $0.0016 per share 

executed for directed orders routed to 

BX. NASDAQ is, however, lowering the 

fee to route orders for such securities to 

BX if the orders check the Nasdaq 

Market Center book for the full size of 

the order prior to routing but are not 

designated as eligible for posting to the 

Nasdaq Market Center book after 

routing. The new fee for such orders 

will be $0.0016 per share, rather than 

the current fee of $0.0029 or $0.0030. 

Finally, NASDAQ is deleting obsolete 

fee language regarding a surcharge for 

orders routed to the American Stock 

Exchange and charged a fee by the 

specialist. Specialists at NYSEAlternext 

(formerly the American Stock Exchange) 

no longer charge this fee. 

Fees for Routing of Securities Other 

Than Exchange-Traded Funds to NYSE 

With respect to fees for routing orders 

for securities other than ETFs to NYSE, 

NASDAQ is modifying the volume level 

required to qualify for a reduced routing 

fee. Currently, members with an average 

daily volume of more than 35 million 

shares of liquidity provided pay a fee of 

$0.0019 per share when routing an order 

to NYSE that does not attempt to 

execute in the Nasdaq Market Center 

prior to routing and that is not 

designated as an Intermarket Sweep 

Order.12 Members with a lower volume 

of liquidity provision pay $0.0020 per 

share when routing such orders. The 

volume of liquidity provision required 

to receive the reduced routing rate is 

being raised to an average daily volume 

of 50 million shares of liquidity 

provided. 

For orders that execute at NYSE as an 

odd lot (including the odd lot portion of 

a partial round lot orders), NASDAQ 

will charge a fee of $0.0005 (rather than 

$0.001) to reflect a recent fee change by 

NYSE.13 In addition, in March 2009, 

NASDAQ instituted a per order fee for 

round lot or mixed lot orders that are 

designated only to remove liquidity 

from the NASDAQ book prior to routing 

to NYSE (‘‘DOTI Orders’’). The fee, 

which is designed to discourage 

inefficient use of DOTI Orders that do 

not result in executions, applies if a 

member sends an average of more than 

10,000 DOTI Orders per day during the 

month and its ratio of DOTI Orders to 

executions exceeds 300 to 1. NASDAQ 

is modifying this fee to exclude from the 

calculation of a member’s DOTI Orders 

during the month the day with the 

Federal Register / Vol. 74, No. 69 / Monday, April 13, 2009 / Notices 16905 

14 15 U.S.C. 78f. 

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

16 15 U.S.C. 78s(b)(3)(a)(ii) [sic]. 

17 17 CFR 240.19b–4(f)(2). 18 17 CFR 200.30–3(a)(12). 

single highest ratio of DOTI Orders to 

executions. Because the purpose of the 

new fee is to discourage persistently 

inefficient use of DOTI Orders, the 

change will exclude from the 

calculation an ‘‘outlier’’ day that may 

occur due to unusual conditions on a 

particular day. This will help to guard 

against the possibility that a member 

that is a high volume user of DOTI 

Orders may be assessed the per order 

charge merely due to one day on which 

its volume of DOTI Orders is 

disproportionate to executions. 

Recent widespread reductions in the 

quoted prices of cash equities have 

increased the relative costs of accessing 

liquidity by making bid-ask spreads 

account for a greater percentage of that 

cost. Accordingly, NASDAQ believes 

that its members have become more 

focused than ever on paying the lowest 

possible cost when accessing liquidity. 

The proposed changes to fees for 

execution and routing of orders for 

securities listed on NASDAQ or NYSE 

are designed to respond to this trend by 

significantly reducing the cost to access 

liquidity (and to route, when liquidity 

must be sought on other venues). To 

ensure that the changes do not unduly 

impact NASDAQ’s revenues, they are 

being partially offset by increasing the 

volume levels required to qualify for 

favorable liquidity provider credits, 

favorable fees to access liquidity in 

securities listed on venues other than 

NASDAQ or NYSE, and favorable fees 

for routing certain types of orders to 

NYSE. 

2. Statutory Basis 

NASDAQ believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,14 in 

general, and with Section 6(b)(4) of the 

Act,15 in particular, in that it provides 

for the equitable allocation of reasonable 

dues, fees and other charges among 

members and issuers and other persons 

using any facility or system which 

NASDAQ operates or controls. The 

proposed fee change applies uniformly 

to all NASDAQ members. The impact of 

the changes upon the net fees paid by 

a particular market participant will 

depend upon a number of variables, 

including its monthly volume, the order 

types it uses, the prices of its quotes and 

orders (i.e., its propensity to add or 

remove liquidity), and the listing venue 

for the securities that it trades. 

NASDAQ notes that it operates in a 

highly competitive market in which 

market participants can readily direct 

order flow to competing venues if they 

deem fee levels at a particular venue to 

be excessive. The proposed rule change 

reflects a significant reduction in the 

fees charged by NASDAQ to route 

orders and access liquidity with respect 

to securities listed on NASDAQ or 

NYSE. Although this reduction is 

partially offset by (i) reductions in the 

overall level of credits paid to liquidity 

providers, (ii) increases in the overall 

fees charged to route or access liquidity 

with respect to securities not listed on 

NASDAQ or NYSE and (iii) increases in 

the overall fees charged to route certain 

orders to NYSE, Nasdaq believes that 

the applicable fees and credits remain 

competitive with those charged by other 

venues and therefore continue to be 

reasonable and equitably allocated to 

those members that opt to direct orders 

to NASDAQ rather than competing 

venues. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASDAQ does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 16 and 

subparagraph (f)(2) of Rule 19b–4 

thereunder.17 At any time within 60 

days of the filing of the proposed rule 

change, the Commission may summarily 

abrogate such rule change if it appears 

to the Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2009–029 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–2009–029. This 

file number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying 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 will also be available 

for inspection and copying at the 

principal office of the self-regulatory 

organization. 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–2009–029 and should be 

submitted on or before May 4, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–8325 Filed 4–10–09; 8:45 am] 

BILLING CODE 8010–01–P