Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / Notices 74147 

23 15 U.S.C. 78s(b)(3)(A). 

24 17 CFR 240.19b–4. 25 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). 

4 17 CFR 240.19b–4(f)(6)(iii). 

5As defined below. 

6See BATS Rules 1.5(x) and 11.3; BYX Rules 

1.5(x) and 11.3. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change would not 

impose any burden on competition. The 

Exchange believes that the proposed 

rule changes will not burden 

intramarket competition because all 

Sponsoring Members and Sponsored 

Participants would be subject to the 

same requirements for sponsored access. 

The proposed rule change is not 

designed to address any competitive 

issues but rather is designed to provide 

greater harmonization among the 

Exchange, EDGX, BATS and BYX rules 

of similar purpose, resulting in less 

burdensome and more efficient 

regulatory compliance for common 

members of the BGM Affiliated 

Exchanges. 

(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 

The Exchange has designated this rule 

filing as non-controversial under 

Section 19(b)(3)(A) of the Act 23 and 

paragraph (f)(6) of Rule 19b–4 

thereunder.24

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (1) Necessary or appropriate in 

the public interest; (2) for the protection 

of investors; or (3) 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 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 email to rule-comments@

sec.gov. Please include File No. SR– 

EDGA–2014–32 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File No. 

SR–EDGA–2014–32. This file number 

should be included on the subject line 

if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet 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 

10:00 a.m. and 3:00 p.m. 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–EDGA– 

2014–32 and should be submitted on or 

before January 5, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29244 Filed 12–12–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73796; File No. SR–EDGX– 

2014–33] 

Self-Regulatory Organizations; EDGX 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change to Rules 1.5 and 11.3 of 

EDGX Exchange, Inc. 

December 9, 2014. 

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 November 

28, 2014, EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange has 

designated this proposal as a ‘‘noncontroversial’’ proposed rule change 

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

Act 3 and Rule 19b–4(f)(6)(iii) 

thereunder,4 which renders it effective 

upon filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange filed a proposal to 

amend Rules 1.5(z), the definition of 

Sponsored Participant,5 and 11.3, titled 

Access, to harmonize its sponsored 

access rules and definitions with those 

set forth under BATS Exchange, Inc. 

(‘‘BATS’’) Rules 1.5(x) and 11.3 as well 

as BATS Y-Exchange, Inc. (‘‘BYX’’) 

Rules 1.5(x) and 11.3.6

The text of the proposed rule change 

is available at the Exchange’s Web site 

at http://www.directedge.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 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 


emcdonald on DSK67QTVN1PROD with NOTICES
74148 Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / Notices 

7See supra note 5. 

8See Securities Exchange Act Release No. 71449 

(January 30, 2014), 79 FR 6961 (February 5, 2014) 

(SR–EDGX–2013–43; SR–EDGA–2013–34). 

9The Exchange understands that EDGA is to file 

a proposed rule change with the Commission to 

adopt similar requirements. 

10System is defined in EDGX Rule 1.5(cc). 

11Sponsored Participant is defined in EDGX Rule 

1.5(z). 

12Sponsoring Members is defined in EDGX Rule 

1.5(aa). 

13 17 CFR 240.15c3–5. 

14 17 CFR 240.15c3–5(b). 15See EDGX Rule 11.4. 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant parts of such 

statements. 

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rules 1.5(z) and 11.3 to harmonize its 

sponsored access rules with those set 

forth under BATS Rules 1.5(x) and 11.3 

and BYX Rules 1.5(x) and 11.3.7 Earlier 

this year, the Exchange and its affiliate 

EDGA Exchange, Inc. (‘‘EDGA’’) 

received approval to effect a merger (the 

‘‘Merger’’) of the Exchange’s parent 

company, Direct Edge Holdings LLC, 

with BATS Global Markets, Inc., the 

parent of BATS and BYX (together with 

BATS, BYX, EDGA and EDGX, the 

‘‘BGM Affiliated Exchanges’’).8 In the 

context of the Merger, the BGM 

Affiliated Exchanges are working to 

align certain rules, retaining only 

intended differences between the BGM 

Affiliated Exchanges. As part of this 

effort, the proposal set forth below 

harmonizes Exchange Rules 1.5(z) and 

11.3 with BATS and BYX Rules 1.5(x) 

and 11.3 by aligning the rules around 

sponsored access for all sponsored 

participants and sponsoring members of 

the BGM Affiliated Exchanges.9

Rule 11.3 currently provides that the 

System 10 shall be available for entry 

and execution of orders by Users with 

authorized access. In order to obtain 

authorized access to the System, each 

Member must enter into an agreement 

with the Exchange in such form as the 

Exchange may provide. A Sponsored 

Participant 11 may obtain authorized 

access to the System only if such access 

is authorized in advance by one or more 

Sponsoring Members 12 as follows: (i) 

Sponsored Participants must enter into 

and maintain sponsored or direct access 

arrangements with one or more 

Sponsoring Members establishing 

proper relationship(s) and account(s) 

through which the Sponsored 

Participant may trade on the System; (ii) 

Sponsoring Member shall maintain a list 

of Sponsored Participants who 

Sponsoring Member has authorized to 

obtain access to the System pursuant to 

this Rule, shall update the list of 

Sponsored Participants as necessary, 

and provide the list of Sponsored 

Participants to the Exchange upon 

request; and (iii) Sponsoring Members 

shall comply with Rule 15c3–5 under 

the Exchange Act (the ‘‘Market Access 

Rule’’) 13 with regard to market access 

arrangements with Sponsored 

Participants. 

The Exchange is proposing to delete 

Rules 11.3(b)(2) and (3), which are 

described in items (ii) and (iii) above. 

The Exchange is proposing to delete 

11.3(b)(2) in order to add more thorough 

requirements for a Member to provide 

sponsored access to a Sponsored 

Participant, as described below. The 

Exchange is proposing to delete Rule 

11.3(b)(3) in order to align the 

Exchange’s rules with those of BATS 

and BYX. The Exchange notes that, 

while Rule 11.3(b)(3) requires a 

Sponsoring Member to comply with the 

Market Access Rule, such obligation 

applies to all brokers or dealers with 

market access 14 and thus exists whether 

or not the Exchange has a rule requiring 

compliance. As such, deleting current 

Rule 11.3(b)(3) does not alter a 

Member’s or a Sponsored Participant’s 

obligation to comply with the Market 

Access Rule. 

The Exchange is also proposing to 

amend Rule 11.3(b)(1) in order to 

replace ‘‘sponsored or direct access 

arrangements’’ with ‘‘customer 

agreements.’’ In coordination with this 

change, the Exchange is also proposing 

to add the following sentence to the end 

of Rule 11.3(b)(1): ‘‘Such customer 

agreement(s) must incorporate the 

sponsorship provisions set forth in 

paragraph (2) below.’’ 

The Exchange is also proposing to add 

a new Rule 11.3(b)(2), which contains 

the requirements for the customer 

agreements referenced in proposed Rule 

11.3(b)(1). As proposed, in order for a 

Sponsored Participant to obtain and 

maintain authorized access to the 

System, a Sponsored Participant and its 

Sponsoring Member must agree in 

writing to the following sponsorship 

provisions: (i) The Sponsored 

Participant and its Sponsoring Member 

must have entered into and maintained 

a User Agreement with the Exchange; 

(ii) the Sponsoring Member must 

acknowledge and agree that all orders 

entered by the Sponsored Participant 

and any person acting on behalf of or in 

the name of such Sponsored Participant 

and any executions occurring as a result 

of such orders are binding in all respects 

on the Sponsoring Member, and the 

Sponsoring Member is responsible for 

any and all actions taken by such 

Sponsored Participant and any person 

acting on behalf of or in the name of 

such Sponsored Participant; (iii) the 

Sponsoring Member shall comply with 

the Exchange’s Certificate of 

Incorporation, By-Laws, Rules and 

procedures, and the Sponsored 

Participant shall comply with the 

Exchange’s Certificate of Incorporation, 

By-Laws, Rules and procedures, as if 

such Sponsored Participant were a 

Member; (iv) the Sponsored Participant 

shall maintain, keep current and 

provide to the Sponsoring Member, and 

to the Exchange upon request, a list of 

Authorized Traders who may obtain 

access to the System on behalf of the 

Sponsored Participant. Sponsored 

Participant shall be subject to the 

obligations of Rule 11.4 with respect to 

such Authorized Traders; 15 (v) the 

Sponsored Participant shall familiarize 

its Authorized Traders with all of the 

Sponsored Participant’s obligations 

under this Rule and will assure that 

they receive appropriate training prior 

to any use or access to the System; (vi) 

the Sponsored Participant may not 

permit anyone other than Authorized 

Traders to use or obtain access to the 

System; (vii) the Sponsored Participant 

shall take reasonable security 

precautions to prevent unauthorized use 

or access to the System, including 

unauthorized entry of information into 

the System, or the information and data 

made available therein. The Sponsored 

Participant understands and agrees that 

the Sponsored Participant is responsible 

for any and all orders, trades and other 

messages and instructions entered, 

transmitted or received under 

identifiers, passwords and security 

codes of Authorized Traders, and for the 

trading and other consequences thereof; 

(viii) the Sponsored Participant 

acknowledges its responsibility to 

establish adequate procedures and 

controls that permit it to effectively 

monitor its employees’, agents’ and 

customers’ use and access to the System 

for compliance with the terms of this 

agreement; and (ix) the Sponsored 

Participant shall pay when due all 

amounts, if any, payable to Sponsoring 

Member, the Exchange or any other 

third parties that arise from the 

Sponsored Participant’s access to and 

use of the System. Such amounts 


emcdonald on DSK67QTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / Notices 74149 

16The Exchange’s Web site is accessible at 

www.directedge.com. 17See supra note 5. 18See Securities Exchange Act Release No. 67711 

(August 22, 2012), 77 FR 52096 (August 28, 2012) 

(SR–EDGX–2012–24). 

19 15 U.S.C. 78f(b). 

20 15 U.S.C. 78f(b)(5). 

21See supra note 5. 

22See supra note 9. 

23 15 U.S.C. 78s(b)(3)(A). 

24 17 CFR 240.19b–4. 

include, but are not limited to 

applicable exchange and regulatory fees. 

The Exchange is also proposing to 

replace Rule 11.3(b)(3) to state that the 

Sponsoring Member must provide the 

Exchange with a written statement in 

form and substance acceptable to the 

Exchange identifying each Sponsored 

Participant by name and acknowledging 

its responsibility for the orders, 

executions and actions of such 

Sponsored Participant. Such written 

statement in form and substance 

acceptable to the Exchange will be 

available as the ‘‘Sponsored Application 

and Agreements’’ form on the 

Exchange’s Web site.16

Finally, the Exchange is proposing to 

amend Rule 1.5(z) to align the definition 

of Sponsored Participant with the 

definition on BATS and BYX 17 and to 

align the definition with the 

relationship between a Sponsoring 

Member, Sponsored Participant, and the 

Exchange, as proposed above. 

Specifically, the Exchange is proposing 

that the term Sponsored Participant 

mean a person which has entered into 

a sponsorship arrangement with a 

Sponsoring Member pursuant to Rule 

11.3. 

The Exchange notes that this proposal 

would in effect restore Exchange Rules 

1.5(z) and 11.3 to their state prior to 

filing SR–EDGX–2012–24 (the 

‘‘Filing’’).18 In the Filing, the Exchange 

described the rationale for the proposed 

changes as being rendered superfluous 

and unnecessary by the adoption of 

Market Access Rule. Such changes, in 

contrast to the rules on BATS and BYX, 

however, created a situation in which 

the Exchange still had Sponsored 

Participants that were entering orders 

through Sponsoring Members, but the 

Exchange had no direct relationship 

with Sponsored Participants. In certain 

circumstances, this arrangement led to 

employees of the Exchange being unable 

to discuss certain order and/or trade 

details with Sponsored Participants. 

Based on these experiences, the 

Exchange no longer views the proposed 

rule text as superfluous, but, rather, 

such proposed rule text outlines a 

reasonable set of standards for a 

sponsored access relationship between 

the Exchange, the Sponsoring Member, 

and the Sponsored Participant. The 

Exchange believes that the proposed 

changes will enhance its rules and, as 

discussed above, harmonize the 

Exchange’s rules with those of BATS 

and BYX. The Exchange does note that 

the proposal is not intended to 

supersede or supplement the Market 

Access Rule in any way, but rather to 

establish a more thorough set of rules 

under which the Exchange, Sponsored 

Participants, and Sponsoring Members 

will interact. As such, the Exchange also 

notes that compliance with the 

proposed rules has no bearing on 

whether any particular Member, 

Sponsoring Member, or Sponsored 

Participant is in compliance with the 

Market Access Rule. 

Implementation Date 

The Exchange intends to implement 

the proposed rule change on or about 

January 12, 2015. The Exchange will 

announce the implementation of the 

proposed rule change via a trading 

notice to be posted on the Exchange’s 

Web site. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act 19 and furthers 

the objectives of Section 6(b)(5) of the 

Act,20 in that it is designed promote just 

and equitable principles of trade, 

remove impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system, and, in 

general, protect investors and the public 

interest. The proposal would effectively 

allow a Sponsoring Member(s) to 

provide a Sponsored Participant(s) with 

access to the Exchange and the ability 

to interact directly with Exchange 

employees. More specifically, the 

Exchange believes that the proposal is 

designed to promote just and equitable 

principles of trade, remove 

impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system, and, in 

general protect investors and the public 

interest because it would allow the 

Exchange to directly recognize the 

trading activity of Sponsored 

Participants and to communicate 

directly with Sponsored Participants 

regarding any potential issues that may 

arise. 

The Exchange believes that the 

proposed rule change is not designed to 

permit unfair discrimination between 

customers, issuers, brokers or dealers. 

The proposed rule change is identical to 

the existing rules of BATS and BYX.21

The proposed rule change is intended to 

align the Exchange’s requirements for 

Sponsoring Members to provide 

sponsored access to Sponsored 

Participants with that of BATS, BYX, 

and EDGA 22 in order to provide 

consistent rules across the BGM 

Affiliated Exchanges. Consistent rules, 

in turn, will simplify the regulatory 

requirements for Members of the 

Exchange that are also participants on 

the other BGM Affiliated Exchanges. 

The proposed rule change would 

provide greater harmonization between 

the rules of the BGM Affiliated 

Exchanges of similar purpose, resulting 

in greater uniformity and less 

burdensome and more efficient 

regulatory compliance. As such, the 

proposed rule change would foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities and would 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change would not 

impose any burden on competition. The 

Exchange believes that the proposed 

rule changes will not burden 

intramarket competition because all 

Sponsoring Members and Sponsored 

Participants would be subject to the 

same requirements for sponsored access. 

The proposed rule change is not 

designed to address any competitive 

issues but rather is designed to provide 

greater harmonization among the 

Exchange, EDGA, BATS and BYX rules 

of similar purpose, resulting in less 

burdensome and more efficient 

regulatory compliance for common 

members of the BGM Affiliated 

Exchanges. 

(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 

The Exchange has designated this rule 

filing as non-controversial under 

Section 19(b)(3)(A) of the Act 23 and 

paragraph (f)(6) of Rule 19b–4 

thereunder.24

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 


emcdonald on DSK67QTVN1PROD with NOTICES
74150 Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / Notices 

25 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 242.611. 

4Securities Exchange Act Release No. 59786 

(April 17, 2009), 74 FR 18769 (April 24, 2009) (SR– 

NASDAQ–2009–033). 

5Subscriptions beyond the ninth are provided at 

no cost because the subscribing member firm has 

met the $1,500 monthly fee cap. 

action is: (1) Necessary or appropriate in 

the public interest; (2) for the protection 

of investors; or (3) 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 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 email to rule-comments@

sec.gov. Please include File No. SR– 

EDGX–2014–33 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

No. SR–EDGX–2014–33. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet 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 

10:00 a.m. and 3:00 p.m. 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–EDGX– 

2014–33 and should be submitted on or 

before January 5, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29243 Filed 12–12–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73789; File No. SR– 

NASDAQ–2014–120] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify 

NASDAQ Rule 7049 Fees 

December 8, 2014. 

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 December 

3, 2014, The NASDAQ Stock Market 

LLC (‘‘NASDAQ’’ or the ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) a 

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 the Substance 

of the Proposed Rule Change 

NASDAQ is proposing to modify fees 

assessed under NASDAQ Rule 7049 for 

the NASDAQ InterACT surveillance 

tool. While the changes proposed herein 

are effective upon filing, the Exchange 

has designated that the amendments be 

operative on January 2, 2015. 

The text of the proposed rule change 

is available at nasdaq.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 those 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant parts 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 amend Rule 

7049 to increase the fee and related fee 

cap for subscription to the NASDAQ 

InterACT service. InterACT is a realtime compliance tool accessed through 

an existing Nasdaq Workstation or 

Weblink ACT 3.0 user account, which 

assists a member firm with supervision 

of its trade activity reported to the 

FINRA/NASDAQ Trade Reporting 

Facility, and with its supervision of 

trade throughs to help in complying 

with Rule 611 of Regulation NMS.3 The 

Exchange currently assesses a 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. The Exchange began 

offering the service in 2009 4 and has not 

increased fees since its adoption, 

notwithstanding that the Exchange’s 

costs in offering and supporting the 

service have increased. Accordingly, 

NASDAQ is proposing to increase the 

fee assessed for the service to $400 per 

month, per user, with an increased fee 

cap of $2,400 per month, per member 

firm. The Exchange is also proposing to 

eliminate the reduced fee rate of $100 

per user, per month assessed for the 

fourth through ninth subscriptions.5

The Exchange notes that offering the 

discounted fee for the fourth through 

ninth user subscriptions was designed 

to encourage member firms to purchase 

more subscriptions, thus ensuring broad 

use of the service and, ultimately, 

NASDAQ’s ability to offer the service 

long-term. NASDAQ believes that the 

reduced fee has had the desired effect 

and, accordingly, is assessing the same 

fee for all subscriptions through the 

sixth, at which point member firms will 

have reached the new fee cap. Lastly, 

upon launch of InterACT in May 2009, 

NASDAQ offered the service at no cost 

for sixty days. Accordingly, NASDAQ is 


emcdonald on DSK67QTVN1PROD with NOTICES