Federal Register / Vol. 75, No. 92 / Thursday, May 13, 2010 / Notices 27031 

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). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62056; File No. SR– 

NASDAQ–2010–056] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Pricing for Option Orders Routed to 

Away Markets and Execution Pricing 

for Certain Options 

May 6, 2010. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on April 30, 

2010, 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 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 Rule 

7050 governing pricing for NASDAQ 

members using the NASDAQ Options 

Market (‘‘NOM’’), NASDAQ’s facility for 

executing and routing standardized 

equity and index options. Specifically, 

NOM proposes to expand the list of 

options that will be assessed routing 

fees of $0.30 per contract for customer 

orders and $0.55 per contract for Firm 

and Market Maker orders that are routed 

from NOM to NASDAQ OMX PHLX, 

Inc. (‘‘Phlx’’), as well as update 

execution pricing for certain options 

and increase the Firm fee for removing 

liquidity in non-Penny Pilot options. 

NASDAQ will make the proposed rule 

changes effective for transactions on or 

after May 3, 2010. 

The text of the proposed rule change 

is set forth below. Italics indicate new 

text. 

* * * * * 

7050. NASDAQ Options Market 

The following charges shall apply to 

the use of the order execution and 

routing services of the NASDAQ 

Options Market by members for all 

securities. 

(1) Fees for Execution of Contracts on 

the NASDAQ Options Market 

FEES AND REBATES

[per executed contract] 

Customer Firm 

Non-NOM 

Market 

maker 

NOM 

Market 

maker 

Penny Pilot Options: 

Rebate to Add Liquidity ............................................................................................................ $0.25 $0.25 $0.25 $0.25 

Fee for Removing Liquidity ...................................................................................................... $0.35 $0.45 $0.45 $0.45 

IWM, QQQQ, SPY 

Rebate to Add Liquidity ............................................................................................................ $0.30 $0.30 $0.30 $0.30 

Fee for Removing Liquidity ...................................................................................................... $0.35 $0.45 $0.45 $0.45 

NDX and MNX 

Rebate to Add Liquidity ............................................................................................................ $0.10 $0.10 $0.10 $0.20 

Fee for Removing Liquidity ...................................................................................................... $0.50 $0.50 $0.50 $0.40 

All Other Options: 

Fee for Adding Liquidity ........................................................................................................... Free $0.30 $0.30 $0.30 

Fee for Removing Liquidity ...................................................................................................... — $0.40 

[$0.20] 

$0.45 $0.45 

Rebate for Removing Liquidity * ............................................................................................... $0.20 — — — 

Transactions in which the same participant is the buyer and the seller shall be charged a net fee of $0.10 per executed contract. 

* No rebate will be paid when a customer order executes against another customer order. 

For a pilot period ending July 31, 2010, the charge for members or non-members entering order via the Options Intermarket Linkage that executes in the Nasdaq Options Market shall be $0.45 per executed contract. 

(2)–(3) No Change. 

(4) Fees for routing contracts to 

markets other than the NASDAQ 

Options Market shall be assessed as 

provided below. The current fees and a 

historical record of applicable fees 

related to orders routed to other 

exchanges shall be posted on the 

NasdaqTrader.com Web site. 

Exchange Customer Firm MM 

BATS .................................................................................................................................................................... $0.36 $0.55 $0.55 

BOX ..................................................................................................................................................................... 0.06 0.55 0.55 

CBOE ................................................................................................................................................................... 0.06 0.55 0.55 

ISE ....................................................................................................................................................................... 0.06 0.55 0.55 

NYSE Arca Penny Pilot ....................................................................................................................................... 0.50 0.55 0.55 

NYSE Arca Non Penny Pilot ............................................................................................................................... 0.06 0.55 0.55 

NYSE AMEX ........................................................................................................................................................ 0.06 0.55 0.55 

PHLX (for all options other than the below listed options) ................................................................................. 0.06 0.55 0.55 


sroberts on DSKD5P82C1PROD with NOTICES
27032 Federal Register / Vol. 75, No. 92 / Thursday, May 13, 2010 / Notices 

5See SR–Phlx–2010–64 (April 26, 2010). For a 

description of the Phlx’s current fee schedule for 

adding and removing liquidity, See Securities 

Exchange Act Release No. 61684 (March 10, 2010), 

75 FR 13189 (March 18, 2010) (SR–Phlx–2010–33). 

6The rebate increase is consistent to a similar 

increase made by NYSEArca. See Securities 

Exchange Act Release No. 61894 (April 13, 2010), 

75 FR 20413 (April 19, 2010) (SR–NYSEArca–2010– 

24). 

7This fee increase is similar to rates assessed by 

NYSEArca and NASDAQ OMX PHLX, Inc. for Firm 

electronic executions. Id.; See Securities Exchange 

Act Release No. 61971 (April 23, 2010), pending 

publication in the Federal Register (SR–Phlx–2010– 

62). 

8 15 U.S.C. 78f. 

9 15 U.S.C. 78f(b)(4). 

10 15 U.S.C. 78f(b)(5). 

11 15 U.S.C. 78s(b)(3)(A)(ii). 

Exchange Customer Firm MM 

PHLX (for the following options only): AA, AAPL. AIG, ALL, AMD, AMR, AMZN, BAC, BRCD, C, CAT, 

CSCO, DELL, DIA, DRYS, EK, F, FAS, FAZ, GDX, GE, GLD, GS, IBM, INTC, IWM, JPM, LVS, MGM, 

MSFT, MU, NEM, NOK, PALM, PFE, POT, QCOM, QQQQ, RIMM, SBUX, SIRI, SKF, SLV, SMH, SNDK, 

SPY, T, TZA, UAUA, UNG, USO, UYG, VZ, WYNN, X, XLF ......................................................................... $0.30 $0.55 $0.55

* * * * * 

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 Rule 

7050 governing the fees assessed for 

options orders entered into NOM but 

routed to and executed on Phlx. 

Specifically, NASDAQ is proposing to 

expand the number of options to which 

certain routing fees apply to reflect the 

expansion of the fee schedule for adding 

and removing liquidity on the Phlx.5

NASDAQ is also proposing to modify 

Rule 7050 governing the fees for 

execution of contracts on NOM by 

updating execution pricing for IWM, 

QQQQ and SPY options, as well as raise 

the Firm fee for removing liquidity in 

non-Penny Pilot options. 

NASDAQ currently assesses a $0.30 

per contract routing fee for customer 

orders, and a $0.55 per contract routing 

fee for Firm and Market Maker orders 

routed from NOM to Phlx for options 

that are subject to fees and rebates for 

adding and removing liquidity as 

described in the Phlx fee schedule. To 

reflect the additions Phlx is making to 

its fee schedule, NASDAQ proposes to 

add the following options to the table 

set forth in Rule 7050(4): Brocade 

Communications Systems, Inc. 

(‘‘BRCD’’); International Business 

Machines Corp. (‘‘IBM’’); Nokia Corp. 

(‘‘NOK’’); Sirius XM Radio, Inc. (‘‘SIRI’’); 

and Direxion Daily Small Cap Bear 3X 

Shares (‘‘TZA’’). 

The Exchange is proposing these fees 

to recoup the majority of transaction 

and clearing costs associated with 

routing orders to Phlx. As with all fees, 

the Exchange may adjust these routing 

fees by filing a new proposed rule 

change. 

NASDAQ currently offers a Penny 

Pilot option rebate of $0.25. NASDAQ is 

proposing to increase the rebate to all 

participants for providing liquidity in 

IWM, QQQQ and SPY options to $0.30 

per executed contract.6 The fee to 

remove liquidity in these options will 

continue to be the standard Penny Pilot 

remove fee of $0.35 for Customers and 

$0.45 for Firms and Market Makers. The 

Exchange also proposes to increase the 

Firm fee for removing liquidity in nonPenny Pilot options from $0.20 to $0.40 

per executed contract.7

The changes are part of the 

Exchange’s continued effort to attract 

and enhance participation on NOM. The 

Exchange believes these proposed fee 

changes are reasonable and equitable in 

that they apply uniformly to all 

similarly situated participants on NOM. 

The Exchange has designated this 

proposal to be operative for trades on or 

after May 3, 2010. 

2. Statutory Basis 

NASDAQ believes that the proposed 

rule changes are consistent with the 

provisions of Section 6 of the Act,8 in 

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

Act,9 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. 

NASDAQ further believes that the 

proposed rule changes are consistent 

with Section 6(b)(5) of the Act 10 in that 

it is designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest; and is not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers, 

or to regulate by virtue of any authority 

conferred by the Act matters not related 

to the purposes of the Act or the 

administration of the Exchange. 

NASDAQ is one of eight options 

market in the national market system for 

standardized options. Joining NASDAQ 

and electing to trade options is entirely 

voluntary. Under these circumstances, 

NASDAQ’s fees must be competitive 

and low in order for NASDAQ to attract 

order flow, execute orders, and grow as 

a market. NASDAQ thus believes that its 

fees are fair and reasonable and 

consistent with the Exchange Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASDAQ does not believe that the 

proposed rule change will impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

To the contrary, NASDAQ has designed 

its fees to compete effectively for the 

execution and routing of options 

contracts and to reduce the overall cost 

to investors of options trading. 

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 11 and 


sroberts on DSKD5P82C1PROD with NOTICES
Federal Register / Vol. 75, No. 92 / Thursday, May 13, 2010 / Notices 27033 

12 17 CFR 240.19b–4(f)(2). 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3A ‘‘Sponsored Customer’’ is a non-Member of the 

Exchange that trades under a sponsoring Member’s 

execution and clearing identity, pursuant to ISE 

Rule 706, Supplementary Material .01. 

4See e-mail from Samir Patel, Assistant General 

Counsel, ISE, to Richard Holley III, Senior Special 

Counsel, Division of Trading and Markets, 

Commission, dated May 3, 2010. 

paragraph (f)(2) of Rule 19b–4 12

thereunder. 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–2010–056 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2010–056. This 

file number should be included on the 

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

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street, NE., 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of the 

Exchange. All comments received will 

be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

publicly available. All submissions 

should refer to File Number SR– 

NASDAQ–2010–056 and should be 

submitted on or before June 3, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–11400 Filed 5–12–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62053; File No. SR–ISE– 

2010–35] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Adopt a Fee Waiver for Its 

PrecISE Terminals 

May 6, 2010. 

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 April 26, 

2010, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) filed with the Securities and 

Exchange Commission the proposed 

rule change, as described in Items I, II, 

and III below, which items have been 

prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The ISE is proposing to amend its 

Schedule of Fees by adopting a fee 

waiver. The text of the proposed rule 

change is available on the Exchange’s 

Web site (http://www.ise.com), 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 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization 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 this proposed rule 

change is to adopt a limited fee waiver 

for PrecISE Trade® (‘‘PrecISE’’), the 

Exchange’s proprietary front-end order 

routing terminal used by Electronic 

Access Members (‘‘EAM’’) and 

sponsored customers 3 of an EAM to 

send order flow to ISE. The Exchange 

currently charges $350 per user per 

month for the first 10 users of an EAM 

and $100 per user per month for all 

subsequent users. The Exchange also 

has a PrecISE sponsored customer fee of 

$350 per sponsored customer per month 

for the first 10 users and $100 per 

sponsored customer per month for all 

subsequent users. 

In order to give new users time to 

become familiar and fully acclimated 

with all of the functionality that PrecISE 

offers, we proposes [sic] to adopt a fee 

waiver applicable to all new users of 

PrecISE. Specifically, we propose to 

waive our PrecISE fees for the first two 

months for all new EAM and sponsored 

customer users. The proposed fee 

waivers are based on ISE’s billing 

period, which begins on the 16th of 

each month and ends on the 15th of the 

following month. So if a new user 

begins using a PrecISE Trade terminal 

on May 16th, that user’s PrecISE fees 

would be waived from May 16–July 15, 

i.e., two billing periods. And if a new 

user begins using a PrecISE Trade 

terminal on May 18th, that user’s 

PrecISE fees would similarly be waived 

from May 18–July 15.4

These proposed fee changes will be 

operative on May 3, 2010. 

2. Statutory Basis 

The basis under the Securities 

Exchange Act of 1934 (the ‘‘Exchange 

Act’’) for this proposed rule change is 

the requirement under Section 6(b)(4) 

that an exchange have an equitable 


sroberts on DSKD5P82C1PROD with NOTICES