Federal Register / Vol. 75, No. 202 / Wednesday, October 20, 2010 / Notices 64769 

13 15 U.S.C. 78s(b)(3)(A). 

14 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the self-regulatory organization 

to submit to the Commission written notice of its 

intent to file the proposed rule change, along with 

a brief description and text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. The 

Exchange has satisfied this requirement. 

15For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

16The text of the proposed rule change is 

available on the Commission’s Web site at http:// 

www.sec.gov/. 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

proposed changes will align the 

Exchange’s rules with rules of other 

market centers that were recently 

amended to address the type of sudden 

price declines that the market 

experienced on the afternoon of May 6, 

2010. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change imposes any 

burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received written comments 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: 

(i) Significantly affect the protection 

of investors or the public interest; 

(ii) Impose any significant burden on 

competition; and 

(iii) Become operative for 30 days 

from the date on which it was filed, or 

such shorter time as the Commission 

may designate, if consistent with the 

protection of investors and the public 

interest, it has become effective 

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

Act 13 and Rule 19b–4(f)(6) 

thereunder.14

The Exchange has requested that the 

Commission waive the 30-day operative 

delay to permit the Exchange to 

commence operations as a national 

securities exchange with rules 

substantively identical to the equity 

trading rules of BATS Exchange. The 

Commission finds that waiver of the 

operative delay is consistent with the 

protection of investors and the public 

interest because such waiver will align 

the Exchange’s rules with recently 

amended rules of BATS Exchange. 

Therefore, the Commission designates 

the proposal operative upon 

commencement of Exchange operation, 

which the Exchange anticipates will be 

October 15, 2010.15

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. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposal 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 

No. SR–BYX–2010–002 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 No. 

SR–BYX–2010–002. 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,16 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 changes 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. Copies of such 

filing will also be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File No. SR–BYX–2010– 

002 and should be submitted on or 

before November 10, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26335 Filed 10–19–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63101; File No. SR– 

NASDAQ–2010–130] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Regarding 

Fees for the Clearly Erroneous Module 

October 14, 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 

7, 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 NASDAQ. The Commission 

is publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

NASDAQ proposes to establish fees 

for the Clearly Erroneous Module. The 

text of the proposed rule change is 

below. Proposed new language is 

underlined. 

7024. Clearly Erroneous Module 

[Reserved] 

The Clearly Erroneous Module, which 

provides real-time clearly erroneous 

surveillance alerts and reports, is 

available to subscribers for a fee of $400 

per MPID, per month for the first 15 

MPIDs subscribed, and for a fee of $100 

per MPID, per month for each MPID 

subscribed in excess of 15. 

* * * * * 


emcdonald on DSK2BSOYB1PROD with NOTICES
64770 Federal Register / Vol. 75, No. 202 / Wednesday, October 20, 2010 / Notices 

3For a description of the Regulation 

Reconnaissance service, see http:// 

www.nasdaqtrader.com/ 

TraderP.aspx?id=RegRecon. 

4See Rule 7041(a). 

5 15 U.S.C. 78f. 

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

7 15 U.S.C. 78f(b)(4). 

8 Id. 

9For example, NASDAQ’s InterACT service is 

offered for subscription fee of $300 per month, per 

user, for the first three users, and $100 per month, 

per user, for each additional user, with a maximum 

fee of $1,500 per month, per member firm. See Rule 

7049. 

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 proposes to offer the Clearly 

Erroneous Module, which is currently 

available as part of a Regulation 

Reconnaissance subscription, as a standalone service with a tiered fee structure. 

The Clearly Erroneous Module provides 

subscribers with trade alerts of 

potentially erroneous trades on 

NASDAQ, the ability to electronically 

submit clearly erroneous reports with 

NASDAQ MarketWatch and to 

anonymously negotiate erroneous trades 

with contra-parties, real-time erroneous 

filing status, and access to the 

subscriber’s historical clearly erroneous 

data. Access to the Clearly Erroneous 

Module will be available as an add-on 

to the NASDAQ Workstation and 

Weblink ACT 2.0 or the Clearly 

Erroneous Viewer. 

The Clearly Erroneous Module and 

the Reg NMS Module are the core 

functions of the Regulation 

Reconnaissance service.3 The 

Regulation Reconnaissance service is 

offered to subscribers at a cost of $1,000 

per MPID, per month.4 Certain member 

firms that possess many MPIDs have 

informed NASDAQ that the current 

price structure for subscription to the 

Clearly Erroneous Module through the 

Regulation Reconnaissance service is 

cost prohibitive as it does not provide 

a tiered fee schedule based on the 

number of MPIDs subscribed. These 

member firms require multiple MPIDs 

due to the nature of their businesses and 

have a need to monitor clearly 

erroneous compliance for each MPID. In 

addition, certain member firms may not 

desire the full functionality of 

Regulation Reconnaissance, yet 

currently must pay for a full 

subscription. To make the service more 

cost effective for all member firms, 

including those that possess a large 

number of MPIDs, NASDAQ is 

proposing to offer the Clearly Erroneous 

Module as a stand-alone service for a fee 

of $400 per MPID per month for any 

member firm that subscribes 15 or fewer 

MPIDs and for a fee of $100 per MPID 

per month for each MPID subscribed in 

excess of 15. 

2. Statutory Basis 

NASDAQ believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,5 in 

general, and with Section 6(b)(5) of the 

Act,6 in particular, because 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 

facilitating transactions in securities, 

and to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system. The Clearly Erroneous Module 

is designed to assist firms with 

monitoring their clearly erroneous 

compliance and, as such, is an 

important tool that members may use to 

help maintain the regulatory integrity of 

the markets. NASDAQ believes that 

offering the module as a stand-alone 

service at a reduced fee will encourage 

wider use of this regulatory tool that is 

otherwise cost-prohibitive to member 

firms, particularly those that possess a 

large number of MPIDs. 

NASDAQ also believes that the 

proposed rule change is consistent with 

Section 6(b)(4) of the Act 7 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 the NASDAQ operates or 

controls, and it does not unfairly 

discriminate between customers, 

issuers, brokers or dealers. NASDAQ is 

offering the Clearly Erroneous Module 

at a rate lower than the Regulation 

Reconnaissance service, which includes 

both the Clearly Erroneous Module and 

the Reg NMS Module. As such, member 

firms are provided an option to pay for 

only the service they desire at a 

discounted rate. Use of Clearly 

Erroneous Module is voluntary, and 

member firms will continue to have 

access to the Clearly Erroneous Module 

through a Regulation Reconnaissance 

subscription if they so choose. 

NASDAQ believes that offering the 

Clearly Erroneous Module at a further 

discounted rate applicable to each MPID 

subscribed in excess of 15 is consistent 

with Section 6(b)(4) of the Act.8 As 

noted, use of the Clearly Erroneous 

Module is voluntary and the 

subscription fees will be imposed on all 

purchasers equally based on the number 

of MPIDs subscribed. In this regard, the 

proposed reduced per MPID fee is 

available to any member that subscribes 

more than 15 MPIDs, with the reduced 

fee applying only to each MPID in 

excess of 15. The Clearly Erroneous 

Module it [sic] is a useful regulatory tool 

that, because it is bundled with 

Regulation Reconnaissance, is cost 

prohibitive to member firms that 

possess many MPIDs due to the nature 

of their businesses. As such, offering the 

service at a discounted rate to members 

that subscribe many MPIDs will allow 

these members to receive the benefit of 

the service that, under a non-tiered fee 

structure, only firms with fewer MPIDs 

could justify. Further, NASDAQ 

receives greater incremental benefits, 

both tangible and intangible, from 

providing multiple subscriptions to its 

members notwithstanding the reduced 

fee. NASDAQ notes that it currently 

provides other services with a tiered fee 

structure based on the on the number of 

users or subscribers.9

The proposed fees will cover the costs 

associated with separately offering the 

service, responding to customer 

requests, configuring NASDAQ’s 

systems, programming to user 

specifications, and administering the 

service, among other things, and may 

provide NASDAQ with a profit to the 

extent costs are covered. NASDAQ 

believes that the proposed fee structure 

strikes a balance between covering these 

costs, and making this useful regulatory 

tool cost effective for all member firms. 

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. 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 202 / Wednesday, October 20, 2010 / Notices 64771 

10 15 U.S.C. 78s(b)(3)(a)(ii). 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19d–1(c)(2). 

3See Securities Exchange Act Release No. 62924 

(September 16, 2010), 75 FR 58011. The notice was 

published under File No. 10–198 used for BATS Y– 

Exchange’s Form 1 application, however the order 

will be published under File No. 4–616. 

4 17 CFR 240.19d–1(c)(1). 

5The Commission adopted amendments to 

paragraph (c) of Rule 19d–1 to allow self-regulatory 

organizations (‘‘SROs’’) to submit for Commission 

approval plans for the abbreviated reporting of 

minor disciplinary infractions. See Securities 

Exchange Act Release No. 21013 (June 1, 1984), 49 

FR 23828 (June 8, 1984). Any disciplinary action 

taken by an SRO against any person for violation 

of a rule of the SRO which has been designated as 

a minor rule violation pursuant to such a plan filed 

with the Commission shall not be considered ‘‘final’’ 

for purposes of Section 19(d)(1) of the Act if the 

sanction imposed consists of a fine not exceeding 

$2,500 and the sanctioned person has not sought an 

adjudication, including a hearing, or otherwise 

exhausted his administrative remedies. 

6On August 13, 2010, the Exchange’s application 

for registration as a national securities exchange, 

including the rules governing the BATS Y– 

Exchange, was approved. See Securities Exchange 

Act Release No. 62716 (August 13, 2010), 75 FR 

51295 (August 19, 2010) (File No. 10–198). In the 

approval order, the Commission noted that BATS 

Y–Exchange Rule 8.15 provides for the imposition 

of fines for minor rule violations pursuant to a 

minor rule violation plan. Accordingly, the 

Commission noted that as a condition to the 

operation of BATS Y–Exchange, the Exchange must 

file a minor rule violation plan with the 

Commission. BATS Y–Exchange represented that 

modifications may be made to Rule 8.15.01 in the 

future. BATS Y–Exchange proposed that, when 

amendments to Rule 8.15.01 are made pursuant to 

a rule filing submitted pursuant to Rule 19b–4 

under the Act, such filing would automatically be 

deemed a request by BATS Y–Exchange for 

Commission approval of a modification to its 

MRVP. 

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.10 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 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 e-mail to rulecomments@sec.gov. Please include File 

No. SR–NASDAQ–2010–130 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 No. 

SR–NASDAQ–2010–130. 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 

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 

NASDAQ. 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 No. SR–NASDAQ– 

2010–130 and should be submitted on 

or before November 10, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26336 Filed 10–19–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63113; File No. 4–616] 

Self-Regulatory Organizations; Order 

Approving Minor Rule Violation Plan 

for BATS Y–Exchange, Inc. 

October 15, 2010. 

On September 10, 2010, BATS Y– 

Exchange, Inc. (‘‘BATS Y–Exchange’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) a proposed minor rule 

violation plan (‘‘MRVP’’) pursuant to 

Section 19(d)(1) of the Securities 

Exchange Act of 1934 (the ‘‘Act’’) 1 and 

Rule 19d–1(c)(2) thereunder.2 The 

proposed MRVP was published for 

public comment on September 23, 

2010.3 The Commission received no 

comments on the proposal. This order 

approves BATS Y–Exchange’s proposed 

MRVP. 

BATS Y–Exchange’s MRVP specifies 

those uncontested minor rule violations 

with sanctions not exceeding $2,500 

which would not be subject to the 

provisions of Rule 19d–1(c)(1) of the 

Act 4 requiring that a self-regulatory 

organization promptly file notice with 

the Commission of any final 

disciplinary action taken with respect to 

any person or organization.5 In 

accordance with Rule 19d–1(c)(2) under 

the Act, the Exchange proposed to 

designate certain specified rule 

violations as minor rule violations, and 

requested that it be relieved of the 

reporting requirements regarding such 

violations, provided it gives notice of 

such violations to the Commission on a 

quarterly basis. BATS Y–Exchange 

included in its proposed MRVP the 

policies and procedures currently 

included in BATS Y–Exchange Rule 

8.15 (‘‘Imposition of Fines for Minor 

Violation(s) of Rules’’) and the rule 

violations included in BATS Y– 

Exchange Rule 8.15.01.6

Pursuant to the Exchange’s proposed 

MRVP, under Rule 8.15, the Exchange 

may impose a fine (not to exceed 

$2,500) on a member or an associated 

person of a member, or a registered or 

non-registered employee of a member 

with respect to any rule listed in Rule 

8.15.01. The Exchange shall serve the 

person against whom a fine is imposed 

with a written statement setting forth 

the rule or rules violated, the act or 

omission constituting each such 

violation, the fine imposed, and the date 

by which such determination becomes 

final or by which such determination 


emcdonald on DSK2BSOYB1PROD with NOTICES