64372 Federal Register / Vol. 75, No. 201 / Tuesday, October 19, 2010 / Notices 

4 In approving this 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). 

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

6 15 U.S.C. 78s(b)(2). 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

expiration months in any index options 

upon which the Exchange calculates a 

constant three-month volatility index. 

In support of its proposal, CBOE 

stated that, since 2009, volatility trading 

has experienced significant growth in 

trading volume. In order to satisfy 

growing demand for a wider variety of 

volatility investment strategies, the 

Exchange is seeking to increase, from 

seven to 12, the number of expiration 

months for broad-based security index 

options upon which the Exchange 

calculates a volatility index. In doing so, 

the Exchange hopes to create flexibility 

that would enable it to create volatility 

indexes of varying lengths in response 

to demand for a wider variety of 

volatility investment strategies. 

Accordingly, the Exchange also 

proposes to delete language from the 

rule text restricting the volatility index 

options to indexes on which the 

Exchange calculates a constant threemonth volatility index. The Exchange 

believes that the additional expirations, 

which will be listed in monthly 

intervals over a one-year time frame, 

will provide the Exchange with the 

flexibility to create indexes that 

represent unique volatility exposures, 

and enable the Exchange to respond 

quickly to investor demand for new 

volatility-based products. 

CBOE further stated that it has 

analyzed its capacity and represents that 

it believes the Exchange and the 

Options Price Reporting Authority have 

the necessary systems capacity to 

handle the additional traffic associated 

with the ability to list series with up to 

12 expiration months for broad-based 

security index options upon which the 

Exchange calculates a volatility index. 

III. Discussion 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.4 Specifically, the 

Commission finds that the proposal is 

consistent with Section 6(b)(5) of the 

Act,5 which requires, among other 

things, that the rules of a national 

securities exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts, 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. 

The proposal will provide investors 

with added flexibility in the trading of 

volatility index options and allow 

investors to establish options positions 

that are more precisely tailored to meet 

their investment objectives. The 

Commission believes that the proposal 

strikes a reasonable balance between the 

Exchange’s desire to accommodate 

market participants by offering a wider 

array of investment opportunities and 

the need to avoid unnecessary 

proliferation of options series and the 

corresponding increase in quotes. The 

Commission expects the Exchange to 

monitor the trading volume associated 

with the additional options series listed 

as a result of this proposal and the effect 

of these additional series on market 

fragmentation and on the capacity of the 

Exchange’s, OPRA’s, and vendors’ 

automated systems. 

In addition, the Commission notes 

that CBOE has represented that it 

believes the Exchange and the Options 

Price Reporting Authority have the 

necessary systems capacity to handle 

the additional traffic associated with the 

newly permitted listings. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,6 that the 

proposed rule change (SR–CBOE–2010– 

077) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26279 Filed 10–18–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63095; File No. SR–MSRB– 

2010–10] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing of Proposed 

Rule Change Consisting of 

Amendments to Rule A–13 To Increase 

Transaction Assessments for Certain 

Municipal Securities Transactions 

Reported to the Board and To Institute 

a New Technology Fee on Reported 

Sales Transactions 

October 13, 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 

September 30, 2010, the Municipal 

Securities Rulemaking Board (‘‘Board’’ 

or ‘‘MSRB’’) 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 MSRB. 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 MSRB has filed with the 

Commission a proposed rule change 

relating to assessments for brokers, 

dealers, and municipal securities 

dealers (‘‘dealers’’) under MSRB Rule A– 

13. The proposed rule change consists 

of amendments to Rule A–13 to increase 

transaction assessments for certain 

municipal securities transactions 

reported to the Board and to institute a 

new technology fee on reported sales 

transactions. The proposed rule change 

would amend Rule A–13 to (a) Increase 

the existing transaction assessments for 

inter-dealer and customer sales from 

.0005% to .001% of the total par value 

of inter-dealer sales and sales to 

customers that are reported by dealers to 

the MSRB (the ‘‘transaction fee’’), and (b) 

impose a technology fee of $1.00 per 

transaction for inter-dealer and 

customer sales reported to the Board 

(the ‘‘technology fee’’). The technology 

fee would be transitional in nature and 

would be reviewed by the Board 

periodically to determine whether it 

should continue to be assessed. The 

MSRB proposes an effective date for this 

proposed rule change of January 1, 

2011. 

The text of the proposed rule change 

is available on the MSRB’s Web site at 

http://www.msrb.org/Rules-andInterpretations/SEC-Filings/2010- 

Filings.aspx 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 

MSRB 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 Board has 

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Federal Register / Vol. 75, No. 201 / Tuesday, October 19, 2010 / Notices 64373 

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 assess reasonable fees 

necessary to defray the costs and 

expenses of operating and administering 

the MSRB. The proposed rule change 

would amend Rule A–13 to (a) Increase 

the existing transaction assessments for 

inter-dealer and customer sales from 

.0005% to .001% of the total par value 

of inter-dealer sales and sales to 

customers that are reported by dealers to 

the MSRB (the ‘‘transaction fee’’), and (b) 

impose a technology fee of $1.00 per 

transaction for inter-dealer and 

customer sales reported to the Board 

(the ‘‘technology fee’’). The technology 

fee would be transitional in nature and 

would be reviewed by the Board 

periodically to determine whether it 

should continue to be assessed. 

Current Sources of Revenue 

The MSRB currently levies four types 

of fees that are generally applicable to 

dealers. Rule A–12 provides for a $100 

initial fee paid once by a dealer when 

it first begins to engage in municipal 

securities activities. Rule A–13 provides 

for an underwriting fee of $.03 per 

$1000 par value of municipal securities 

purchased in a primary offering (with 

specified exceptions), and a transaction 

fee of $.005 per $1000 par value of sale 

transactions of municipal securities 

(with specified exceptions). Finally, 

Rule A–14 provides for an annual fee of 

$500 from each dealer who conducts 

municipal securities activities. 

At present, approximately 90% of the 

Board’s revenue is generated through 

underwriting fees and transaction fees. 

In fiscal year 2009, approximately 55% 

of the Board’s revenue was generated by 

underwriting fees and approximately 

36% of its revenue was generated by 

transaction fees. The underwriting and 

transaction fees assessed pursuant to 

Rule A–13 are generally proportionate 

to a dealer’s activity within the 

industry, as based on the par value 

amount of underwriting and customer 

and inter-dealer transactions during the 

year. Underwriting fees are based on a 

dealer’s participation in the 

underwriting of municipal securities, 

and transaction fees are based on a 

dealer’s participation in the municipal 

securities market in terms of par value 

sold. 

The transaction assessment was last 

modified in 2000 when the Board 

commenced assessments on customer 

sale transactions reported by dealers. 

The transaction fee has not been 

increased since that date, despite the 

additional activities undertaken by the 

MSRB over the last ten years. The 

amount of the underwriting assessment 

has not been increased since 1992, 

although in December 2009 the MSRB 

eliminated certain exemptions from the 

underwriting assessment. 

Rationale for Proposed Rule Change 

The Board is proposing to increase the 

transaction fee and establish a new 

technology fee for three reasons. First, 

the expenses of the MSRB are increasing 

and additional revenue is necessary in 

order to meet projected expenses 

associated with ongoing operations. 

Second, the MSRB needs additional 

revenue to cover anticipated expenses 

associated with its new regulatory 

responsibilities mandated by the DoddFrank Wall Street Reform and Consumer 

Protection Act, Public Law 111–203, 

124 Stat. 1376 (2010) (the ‘‘Dodd-Frank 

Act’’). Third, the MSRB needs additional 

revenue to replace aging and outdated 

information technology software and 

hardware. In particular, funding is 

needed to ensure the operational 

integrity of the MSRB’s information 

systems, retire and update computer 

hardware and software, and conduct 

ongoing risk management including 

business continuity activities and 

system maintenance. The new 

technology fee would be used to 

establish a new technology renewal 

fund, which would be segregated for 

accounting purposes. The technology 

renewal fund is intended to fund 

replacement of aging and outdated 

technology systems and to fund new 

technology initiatives. 

As reflected in the 2009 audited 

financial statement, revenue decreased 

from fiscal year 2008 to 2009 from 

approximately $22.2 million to 

approximately $19.6 million, while 

expenses increased from approximately 

$18.6 million to approximately $21.3 

million. Although revenue has 

increased in fiscal year 2010, primarily 

due to the elimination of certain 

exemptions from underwriting fees, 

expenses have also continued to 

increase. Moreover, the MSRB has not 

set aside separate reserves for major 

technology systems that will need 

replacement or upgrades in the near 

future. 

Several factors have contributed to the 

recent, large increase in operating 

expenses. First, over the last two years, 

the MSRB has significantly improved 

transparency in the municipal securities 

market by developing and implementing 

market information transparency 

systems for the (a) Collection and 

dissemination of electronic official 

statements and other primary market 

documents and information, allowing 

dealers, in most instances, to 

discontinue sending paper copies of 

official statements to new issue 

customers; (b) collection and 

dissemination of electronic continuing 

disclosure documents and related 

information from issuers and their 

agents; (c) collection and dissemination 

of current interest rates and other 

information on auction rate securities 

and variable rate demand obligations 

(the ‘‘SHORT’’ system); (d) production 

and publication of statistical 

information on the municipal securities 

market; and (e) display on a publicly 

available, user-friendly Web site of the 

documents and information described 

above, as well as real-time trade 

information, which are made 

continuously available to the general 

public (the Electronic Municipal Market 

Access System or ‘‘EMMA’’ Web site). 

The EMMA and SHORT systems were 

initially developed and launched using 

general revenue and cash reserves. 

Since inception, significant demand 

from users of these systems and 

regulatory requirements established by 

the SEC have resulted in the 

development of new functionality, with 

an attendant rise in development and 

operating costs. Additionally, the rapid 

adoption by the marketplace of these 

systems as key sources for market 

disclosures, trade prices and interest 

rate information has resulted in an 

accelerated investment in resources to 

support the technology systems. 

In addition, Congress recently passed, 

and the President signed into law, 

comprehensive financial reform 

legislation, the Dodd-Frank Act. 

Effective October 1, 2010, the DoddFrank Act expands the MSRB’s mission 

in a number of ways that will require a 

more substantial commitment of staff 

and technical resources. The expansion 

of the MSRB’s jurisdiction to include 

regulation of municipal advisors will 

require additional rulemaking 

capabilities. The MSRB will also need to 

focus additional resources on 

establishing regulatory protections for 

municipal entities. The MSRB has also 

been given additional responsibilities in 

connection with providing enforcement 

and examination support to the 

Commission, the Financial Industry 

Regulatory Authority (‘‘FINRA’’) and the 

Federal bank regulators, and the MSRB 

has been authorized to develop 

information systems with other Federal 

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64374 Federal Register / Vol. 75, No. 201 / Tuesday, October 19, 2010 / Notices 

3 15 U.S.C. 78o–4(b)(2)(J). 

4RTRS refers to the MSRB’s Real-time 

Transaction Reporting System. 

5The Commission notes that this filing does not 

appear to relate to a subscription service. 

regulators in furtherance of their 

missions. 

Given the significant resource 

commitments needed to further develop 

its information systems, and the 

additional statutory obligations imposed 

on the MSRB by the Dodd-Frank Act, 

the MSRB must generate sufficient 

revenue to ensure that these systems 

operate in a continuous, reliable manner 

while at the same time devoting 

substantial staff resources to developing 

an extensive new body of regulatory 

requirements. 

Description of Proposed Rule Change 

In order to address the projected 

revenue shortfall, the MSRB proposes to 

increase revenue in two ways. First, the 

MSRB proposes to increase the amount 

of the transaction fee assessed on the 

par value of inter-dealer and customer 

sale transactions reported to the MSRB 

by dealers under MSRB Rule G–14(b), 

except for transactions currently 

exempted from the transaction fee as 

provided in MSRB Rule A–13(c)(iii), 

from $.005 per $1000 par value to $.01 

per $1000 par value of such sale 

transactions. Transactions exempted 

from the transaction fee consist of sale 

transactions in municipal securities that 

have a final stated maturity of nine 

months or less or that, at the time of 

trade, may be tendered at the option of 

the holder to an issuer of such securities 

or its designated agent for redemption or 

purchase at par value or more at least 

as frequently as every nine months until 

maturity, earlier redemption, or 

purchase by an issuer or its designated 

agent. This increase in the transaction 

fee is expected to generate an estimated 

$7 million in revenue annually. 

The second fee proposed by the 

MSRB would consist of a technology fee 

assessed at $1.00 per transaction for 

each sale transaction reported to the 

MSRB by dealers under MSRB Rule G– 

14(b). The exemptions from the 

transaction fee, as described above, 

would not apply to the technology fee. 

The technology fee is expected to 

generate an estimated $10 million in 

revenue annually, and would be 

transitional in nature, in that it would 

be reviewed periodically by the MSRB 

in relation to the level of funding 

needed for capital expenditures and to 

maintain the technology renewal fund. 

The funds accumulated in the 

technology renewal fund would be 

solely dedicated to funding capital 

expenses for technology investments. 

As noted above, the bulk of the 

MSRB’s revenue is derived from the 

underwriting and transaction fees, 

which are generally proportionate to a 

dealer’s activity within the industry, as 

based on the par value amount of 

underwriting and customer and interdealer transactions during the year. The 

proposed new technology fee would 

help to establish a more balanced 

assessment of overall fees paid by 

dealers since it would be based on a 

dealer’s participation in the market as 

measured by the total number of interdealer and customer sale transactions 

reported to the MSRB, rather than par 

value, and therefore would help to more 

evenly distribute the burden of dealer 

assessments. The MSRB believes these 

fees are fair and balanced, based on the 

activities of regulated market 

participants. 

Finally, with regard to the expansion 

of the MSRB’s regulatory mandate to 

include regulation of municipal 

advisors and the protection of 

municipal entities, the MSRB will 

continue to review its assessments on 

the market participants it regulates to 

ensure that costs of rulemaking are 

appropriately allocated among the 

entities it regulates. Although the MSRB 

recognizes that an appropriate 

allocation of such regulatory costs may 

not be feasible during the transition of 

the MSRB to its broader mission, it 

expects to revisit the manner in which 

its activities are funded in the coming 

years, as appropriate. The MSRB is 

committed to ensuring that its 

assessments are balanced based in large 

measure on the level of activity of all of 

its regulated entities. 

2. Statutory Basis 

The MSRB believes that the proposed 

rule change is consistent with Section 

15B(b)(2)(J) of the Act,3 which requires, 

in pertinent part, that the MSRB’s rules 

shall: 

Provide that each municipal securities 

broker and each municipal securities dealer 

shall pay to the Board such reasonable fees 

and charges as may be necessary or 

appropriate to defray the costs and expenses 

of operating and administering the Board. 

Such rules shall specify the amount of such 

fees and charges. 

The proposed rule change provides for 

commercially reasonable fees to 

partially offset costs associated with 

operating RTRS 4 and producing and 

disseminating transaction reports to 

subscribers. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Board 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 since it would apply 

equally to all market participants that 

chose to subscribe to the services.5

C. Self-Regulatory Organization’s 

Statement on Comments Received on 

the Proposed Rule Change by Members, 

Participants, or Others 

Written comments were neither 

solicited nor received on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

As the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

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

Number SR–MSRB–2010–10 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–MSRB–2010–10. 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 

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

sro.shtml). Copies of the submission, all 

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Federal Register / Vol. 75, No. 201 / Tuesday, October 19, 2010 / Notices 64375 

6 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3NASDAQ previously stated that it would file a 

proposed rule change to make the NLS pilot fees 

permanent. NASDAQ has also informed 

Commission staff that it is consulting with FINRA 

to develop a proposed rule change by FINRA to 

allow inclusion of FINRA/NASDAQ TRF data in 

NLS on a permanent basis. Because NASDAQ and 

FINRA are continuing to discuss such a proposed 

rule change, and notably, are evaluating what effect 

the decision of the Court of Appeals for the District 

of Columbia Circuit in NetCoaliton v. SEC, No. 09– 

1042 (D.C. Cir. 2010) and recent amendments to 

Section 19 of the Act may have on a proposal to 

make the pilot permanent, FINRA and NASDAQ 

have not completed their consultations regarding 

such a proposed rule change. Accordingly, 

NASDAQ is filing to seek a three-month extension 

of the existing pilot. 

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 MSRB’s offices. 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–MSRB–2010–10 and should 

be submitted on or before November 9, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26278 Filed 10–18–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63092; File No. SR– 

NASDAQ–2010–129] 

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 

October 13, 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 October 

1, 2010, 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 the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

NASDAQ 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’’ 

data feeds containing last sale activity in 

US equities within the NASDAQ Market 

Center and reported to the jointlyoperated 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 October 1, 2010 to December 31, 

2010. 

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 

underlined; proposed deletions are in 

brackets. 

* * * * * 

7039. NASDAQ Last Sale Data Feeds 

(a) For a three month pilot period 

commencing on [July] October 1, 2010, 

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)–(2) No change. 

(b)–(c) No change. 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item III below. 

The Exchange has prepared summaries, 

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

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Prior to the launch of NLS, public 

investors that wished to view market 

data to monitor their portfolios 

generally had two choices: (1) Pay for 

real-time market data or (2) use free data 

that is 15 to 20 minutes delayed. To 

increase consumer choice, NASDAQ 

proposed a pilot to offer access to realtime market data to data distributors for 

a capped fee, enabling those distributors 

to disseminate the data via the internet 

and television at no cost to millions of 

internet users and television viewers. 

NASDAQ now proposes a three-month 

extension of that pilot program, subject 

to the same fee structure as is applicable 

today.3

NLS consists of two separate ‘‘Level 1’’ 

products containing last sale activity 

within the NASDAQ market and 

reported to the jointly-operated FINRA/ 

NASDAQ TRF. First, the ‘‘NASDAQ Last 

Sale for NASDAQ’’ data product is a 

real-time data feed that provides realtime last sale information including 

execution price, volume, and time for 

executions occurring within the 

NASDAQ system as well as those 

reported to the FINRA/NASDAQ TRF. 

Second, the ‘‘NASDAQ Last Sale for 

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