Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Notices 75217 

27 15 U.S.C. 78s(b)(2). 

28 Id. 

29 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

Reference Room, 100 F Street NE., 

Washington, DC 20549–1090, on official 

business days between the hours of 

10:00 a.m. and 3:00 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 

available publicly. All submissions 

should refer to File Number SR– 

NYSEMKT–2014–81, and should be 

submitted on or before January 7, 2015. 

V. Accelerated Approval of Proposed 

Rule Change, As Modified by 

Amendment No. 1 

As discussed above, the Exchange 

submitted Amendment No. 1 to provide 

further justification as to why the 

Exchange believes the proposed rule 

change is consistent with the Act. The 

Exchange states in Amendment No. 1, 

among other things, that to the extent a 

Clearing Member might reasonably 

require a User to provide access to its 

risk settings as a prerequisite to 

continuing to clear trades on the User’s 

behalf, the Exchange’s proposal to share 

those risk settings directly reduces the 

administrative burden on Users and 

ensures that Clearing Members are 

receiving information that is up-to-date 

and conforms to the settings active in 

Exchange systems. The Exchange 

further notes in Amendment No. 1 that 

any User may become a Clearing 

Member, which would enable that User 

to avoid sharing risk settings with any 

third party. The Commission believes 

that Amendment No. 1 does not 

materially affect the substance of the 

proposed rule change or raise any novel 

or unique regulatory issues. 

Accordingly, the Commission finds 

good cause, pursuant to Section 19(b)(2) 

of the Act,27 for approving the proposed 

rule change, as modified by Amendment 

No. 1, on an accelerated basis. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,28 that the 

proposed rule change (SR–NYSEMKT– 

2014–81), as modified by Amendment 

No. 1 thereto, be and it hereby is, 

approved on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29495 Filed 12–16–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73821; File No. SR–NYSE– 

2014–65] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change 

Amending Its Continued Listing 

Requirements in Relation to the Late 

Filing of a Company’s Annual Report 

With the Securities and Exchange 

Commission as set Forth in Section 

802.01E of the Exchange’s Listed 

Company Manual 

December 11, 2014. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on December 

4, 2014, New York Stock Exchange LLC 

(‘‘NYSE’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory 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 Exchange proposes to amend its 

continued listing requirements in 

relation to the late filing of a company’s 

annual report with the Securities and 

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) as set forth in Section 

802.01E of the Exchange’s Listed 

Company Manual (the ‘‘Manual’’). The 

text of the proposed rule change is 

available on the Exchange’s Web site at 

www.nyse.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 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 

The Exchange proposes to amend its 

continued listing requirements in 

relation to the late filing of a company’s 

annual report with the SEC as set forth 

in Section 802.01E (the ‘‘Late Filer 

Rule’’) of the Manual. As amended, the 

Late Filer Rule will (i) expand the rule 

to impose a maximum period within 

which a company must file a late 

quarterly report on Form 10–Q in order 

to maintain its listing and (ii) clarify the 

Exchange’s treatment of companies 

whose annual or quarterly reports are 

defective at the time of filing or become 

defective at some subsequent date. 

In its current form, the Late Filer Rule 

deems a listed company to be 

delinquent in filing its annual report on 

Forms 10–K, 20–F, 40–F or N–CSR with 

the SEC if it fails to submit the filing by 

the date such report was required to be 

filed by the applicable form, or if a Form 

12b–25 was timely filed with the SEC, 

the extended filing due date for the 

annual report. During the six-month 

period from the date of such 

delinquency, the Exchange monitors the 

company and the status of the 

delinquent annual report, including 

through contact with the company, until 

the filing delinquency is cured. If the 

company fails to cure such delinquency 

within the initial six-month period, the 

Exchange may, in its sole discretion, 

allow the company’s securities to be 

traded for up to an additional six-month 

period depending on the company’s 

specific circumstances. If the Exchange 

determines that an additional trading 

period of up to six months is not 

appropriate, suspension and delisting 

procedures are commenced in 

accordance with the procedures set out 

in Section 804.00 of the Listed Company 

Manual. 

A company is not currently subject to 

the compliance periods set forth in the 

Late Filer Rule in connection with a 

failure to timely file a quarterly report 

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75218 Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Notices 

4While a company is not currently subject to the 

compliance periods in the Late Filer Rule in 

connection with the failure to timely file a Form 

10–Q, such companies are subject to the Exchange’s 

late filer (or ‘‘.LF’’) indicator process. The .LF 

indicator is appended to the company’s trading 

symbol as disseminated on the consolidated tape 

and to market data vendors and the company’s 

name is included on the late filer list on the 

Exchange’s Web site. The .LF indicator and web 

posting commence five days after the due date or 

extended due date (if applicable) of the first late 

annual report or Form 10–Q (unless the company 

has submitted the required report within that five 

day period) and continue until the company 

becomes current again with respect to all required 

periodic reports. 

5The annual report or quarterly report on Form 

10–Q that gives rise to a Late Filing Delinquency 

shall be referred to in the Late Filer Rule as 

amended as the ‘‘Delinquent Report.’’ 

6The following is a non-exclusive list of elements 

that, if missing from a filing, would cause the 

Exchange to deem the company to have incurred a 

Late Filing Delinquency: The filing does not 

include required financial statements or a required 

audit opinion; a required financial statement audit 

opinion includes qualifying or disclaiming language 

or the auditor provides an adverse financial 

statement audit opinion; a required financial 

statement audit opinion is unsigned or undated; 

there is a discrepancy between the period end date 

for required financial statements and the date cited 

in the related audit report; the company’s auditor 

has not conducted a SAS 100 review with respect 

to the company’s Form 10–Q; required chief 

executive officer or chief financial officer 

certifications are missing; missing Sarbanes-Oxley 

Act Section 404 required internal control report or 

auditor certification; the filing does not comply 

with the applicable SEC XBRL requirements; or the 

filing does not include signatures of officers or 

directors required by the applicable form. In making 

this determination, the Exchange is simply applying 

its own rules and is not making any judgment as 

to the sufficiency of the filing in question for 

purposes of compliance with any requirement 

under SEC rules. 

7For purposes of the cure periods described 

herein, an Extended Non-Reliance Disclosure Event 

will be deemed to have occurred on the date of 

original issuance of the Non-Reliance Disclosure. If 

the Exchange believes that a company is unlikely 

to refile all required corrected financial statements 

within 60 days after a Non-Reliance Disclosure or 

that the errors giving rise to such Non-Reliance 

Disclosure are particularly severe in nature, the 

Exchange may, in its sole discretion, determine 

earlier than 60 days that the applicable company 

has incurred a Filing Delinquency as a result of 

such Non-Reliance Disclosure. 

8Under the Late Filer Rule as amended, a 

company that has an uncured Filing Delinquency 

will not incur an additional Filing Delinquency if 

it fails to file a Subsequent Report by the applicable 

Filing Due Date. However, in order to cure its initial 

Filing Delinquency, no Subsequent Report may be 

delinquent or deficient on the date by which the 

initial Filing Delinquency is required to be cured. 

on Form 10–Q with the SEC.4 The 

Exchange now proposes to extend the 

application of the rule to the late filing 

of Form 10–Qs. As proposed, a company 

would be deemed to be a delinquent 

filer under the amended rule as of the 

due date (or extended due date if a Form 

12b–25 is timely filed with the SEC) (the 

‘‘Filing Due Date’’) of the first 10–Q or 

annual report with respect to which a 

company incurs a delinquency (a ‘‘Late 

Filing Delinquency’’).5 The Exchange 

will also deem a company to have 

incurred a Late Filing Delinquency if it 

submits an annual report or Form 10– 

Q to the SEC by the applicable Filing 

Due Date, but such filing is deficient in 

some respect in meeting the 

requirements of the applicable SEC form 

and the Exchange determines in its sole 

discretion that such deficiency is 

material in nature.6

In addition, the Exchange proposes to 

clarify its treatment of a company: 

• That files its annual report without 

an audit report from its independent 

auditor for any or all of the periods 

included in such annual report (a 

‘‘Required Audit Report’’ and the 

absence of a Required Audit Report, a 

‘‘Required Audit Report Delinquency’’); 

• whose independent auditor 

withdraws a Required Audit Report or 

the company files a Form 8–K with the 

SEC pursuant to Item 4.02(b) thereof 

disclosing that it has been notified by its 

independent auditor that a Required 

Audit Report or completed interim 

review should no longer be relied upon 

(a ‘‘Required Audit Report Withdrawal 

Delinquency’’); or 

• that files a Form 8–K with the SEC 

pursuant to Item 4.02(a) thereof to 

disclose that previously issued financial 

statements should no longer be relied 

upon because of an error in such 

financial statements or, in the case of a 

foreign private issuer, makes a similar 

disclosure in a Form 6–K filed with the 

SEC or by other means (a ‘‘Non-Reliance 

Disclosure’’) and, in either case, the 

company does not refile all required 

corrected financial statements within 60 

days of the issuance of the Non-Reliance 

Disclosure (an ‘‘Extended Non-Reliance 

Disclosure Event’’ and, together with a 

Late Filing Delinquency, a Required 

Audit Report Delinquency and a 

Required Audit Report Withdrawal 

Delinquency, a ‘‘Filing Delinquency’’).7

Upon the occurrence of a Filing 

Delinquency, the Exchange will 

promptly (typically within five business 

days) send written notification to a 

company of its procedures relating to 

late filings. During the six-month period 

from the date of the Filing Delinquency 

(the ‘‘Initial Cure Period’’), the Exchange 

will monitor the company and the status 

of the Delinquent Report and any 

subsequent annual report or quarterly 

report on Form 10–Q the company fails 

to file by the applicable Filing Due Date 

(a ‘‘Subsequent Report’’), through 

contact with the company, until the 

Filing Delinquency is cured.8 If the 

company fails to cure the Filing 

Delinquency within the Initial Cure 

Period, the Exchange may, in its sole 

discretion, allow the company’s 

securities to be traded for up to an 

additional six-month period (the 

‘‘Additional Cure Period’’) depending 

on the company’s specific 

circumstances. If the Exchange 

determines that an Additional Cure 

Period is not appropriate, suspension 

and delisting procedures will 

commence in accordance with the 

procedures set out in Section 804.00 of 

the Listed Company Manual. A 

company is not eligible to follow the 

procedures outlined in Sections 802.02 

and 802.03 with respect to this criterion. 

Notwithstanding the foregoing, 

however, the Exchange may in its sole 

discretion decide (i) not to afford a 

company any Initial Cure Period or 

Additional Cure Period, as the case may 

be, at all or (ii) at any time during the 

Initial Cure Period or Additional Cure 

Period, as the case may be, to truncate 

the Initial Cure Period or Additional 

Cure Period, as the case may be, and 

immediately commence suspension and 

delisting procedures if the company is 

subject to delisting pursuant to any 

other provision of the Listed Company 

Manual, including if the Exchange 

believes, in its sole discretion, that 

continued listing and trading of a 

company’s securities on the Exchange is 

inadvisable or unwarranted in 

accordance with Sections 802.01A, 

802.01B, 802.01C or 802.01D of the 

Listed Company Manual. The Exchange 

may also commence suspension and 

delisting procedures if it believes, in its 

sole discretion, that it is advisable to do 

so on the basis of an analysis of all 

relevant factors, including, but not 

limited to, the following: 

• Whether there are allegations of 

financial fraud or other illegality in 

relation to the company’s financial 

reporting; 

• the resignation or termination by 

the company of the company’s 

independent auditor due to a 

disagreement; 

• any extended delay in appointing a 

new independent auditor after a prior 

auditor’s resignation or termination; 

• the resignation of members of the 

company’s audit committee or other 

directors; 

• the resignation or termination of the 

company’s chief executive officer, chief 

financial officer or other key senior 

executives; 

• any evidence that it may be 

impossible for the company to cure its 

Filing Delinquency within the cure 

periods otherwise available under the 

Late Filer Rule; and 

• any past history of late filings. 

In determining whether an Additional 

Cure Period after the expiration of the 

Initial Cure Period is appropriate, the 

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Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Notices 75219 

9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). 

Exchange will consider the likelihood 

that the Delinquent Report and all 

Subsequent Reports can be filed or 

refiled, as applicable, during the 

Additional Cure Period, as well as the 

company’s general financial status, 

based on information provided by a 

variety of sources, including the 

company, its audit committee, its 

outside auditors, the staff of the SEC 

and any other regulatory body. The 

Exchange strongly encourages 

companies to provide ongoing 

disclosure on the status of the 

Delinquent Report and any Subsequent 

Reports to the market through press 

releases, and will also take the 

frequency and detail of such 

information into account in determining 

whether an additional trading period is 

appropriate. 

If the Exchange determines that an 

Additional Cure Period is appropriate 

and the company fails to file the 

Delinquent Report and all Subsequent 

Reports by the end of such additional 

period, suspension and delisting 

procedures will commence immediately 

in accordance with the procedures set 

out in Section 804.00. In no event will 

the Exchange continue to trade a 

company’s securities if (i) it has failed 

to cure its Filing Delinquency and (ii) is 

not current with all Subsequent Reports, 

on the date that is twelve months after 

its initial Filing Delinquency. 

The Exchange proposes that the 

revised Late Filer Rule will become 

operative on March 1, 2015. 

Accordingly, the current provisions of 

Section 802.01E of the Manual will be 

applicable to any listed company that 

fails to timely file an annual report 

(Forms 10–K, 20–F, 40–F or N–CSR) 

prior to March 1, 2015. On or after 

March 1, 2015, any listed company that 

fails to timely file an annual report 

(Forms 10–K, 20–F, 40–F or N–CSR) or 

quarterly report on Form 10–Q will be 

subject to the amended provisions of 

Section 802.01E. Any listed company 

that is late as of March 1, 2015, in filing 

a Form 10–Q with a due date prior to 

that date will not be subject to the 

proposed amended rule with respect to 

that filing. However, any such company 

will be subject to the proposed amended 

rule with respect to any periodic report 

it does not file on a timely basis whose 

due date is on or after March 1, 2015. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,9 in general, and 

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

of the Act,10 in particular in that it is 

designed 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. The 

Exchange believes that the proposed 

amendment is consistent with the 

investor protection objectives of Section 

6(b)(5) because: (i) It strengthens the 

Exchange’s continued listing 

requirements with respect to delinquent 

SEC filings by deeming companies 

delinquent if they fail to file their 

annual report or Form 10–Q on a timely 

basis and by subjecting companies to 

the late filer process if there are material 

inadequacies in their required annual or 

quarterly filings; and (ii) the more 

stringent requirements will encourage 

listed companies to submit timely and 

compliant periodic reports to the SEC. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purpose of the Act. The proposed 

rule change does not affect competition 

in any way, but rather simply seeks to 

protect investors by insuring that 

companies cannot remain listed for any 

extended period of time without 

appropriately filing their required 

periodic financial reports with the SEC. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to 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 up to 90 days (i) as the 

Commission may designate 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 

the 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 email to rule-comments@

sec.gov. Please include File Number SR– 

NYSE–2014–65 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2014–65. 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 the 

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 

available publicly. All submissions 

should refer to File Number SR–NYSE– 

2014–65 and should be submitted on or 

before January 7, 2015. 

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75220 Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Notices 

11 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. 78f. 

4 15 U.S.C. 78f(b)(4) and (5). 

5Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496 (June 29, 2005). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29498 Filed 12–16–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73820; File No. SR– 

NASDAQ–2014–111] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify a 

Level 2 Professional Subscriber Fee 

December 11, 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 November 

28, 2014, 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 modify the 

NASDAQ Level 2 Professional 

Subscriber (‘‘Subscriber’’) fee. While the 

changes proposed herein are effective 

upon filing, the Exchange has 

designated that the amendments be 

operative on January 1, 2015. 

* * * * * 

7023. NASDAQ Depth-of-Book Data 

(a) No change. 

(b) Subscriber Fees. 

(1) NASDAQ Level 2. 

(A) Non-Professional Subscribers pay 

a monthly fee of $9 each; 

(B) Professional Subscribers pay a 

monthly fee of $[4]50 each for Display 

Usage based upon Direct or Indirect 

Access, or for Non-Display Usage based 

upon Indirect Access only; 

(C)–(E) No Change. 

(2)–(4) No change. 

(c)–(e) 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, 

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 

The purpose of the proposed rule 

change is to increase the NASDAQ 

Level 2 Professional Subscriber fee 

(‘‘Level 2 fee’’). Specifically, the 

Exchange proposes to increase the Level 

2 fee by $5 from $45 to $50 for display 

usage based upon direct or indirect 

access, or for non-display usage based 

upon indirect access only. This 

proposed rule change will not affect the 

pricing of the NASDAQ OpenView NonProfessional and Professional Subscriber 

fees. 

The NASDAQ Level 2 product is 

completely optional. NASDAQ has 

enhanced this product through capacity 

upgrades and regulatory data sets over 

the last approximately 30 years and the 

release of a new (more efficient) binary 

version this year. The network capacity 

for NASDAQ Level 2 has increased from 

a 56 Kb feed in 1983 to the current 33 

Mb feed. Additionally, since NASDAQ 

Level 2 is also used for market making 

functions, NASDAQ has invested over 

the years to add regulatory data sets, 

such as Market Maker Mode, Trading 

Action status, Limit Up—Limit Down, 

Market Wide Circuit Breaker (MWCB) 

messaging, Short Sale Threshold 

Indicator, as well as other regulatory 

information. 

In 2014 NASDAQ expanded the 

reference data available for each 

security. Level 2 had also been 

improved with the release this year to 

give more transparency on Issue 

Classification and associated Issue SubType, as well as the IPO flag and the 

flags to help further identify exchange 

traded products. Additionally, 

NASDAQ is taking steps to increase 

resiliency with the upcoming additional 

back-up feed (also referred to as the ‘‘B’’ 

feed) in the Carteret co-location facility. 

This helps to reduce cost for customers 

by receiving both the ‘‘A’’ feed and ‘‘B’’ 

feed from the same co-location facility 

while retaining an additional ‘‘B’’ feed 

out of the mid-Atlantic co-location 

facility to reduce proximity risk. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,3

in general, and with Section 6(b)(4) and 

6(b)(5) of the Act,4 in particular, in that 

it provides an equitable allocation of 

reasonable fees among Subscribers and 

recipients of NASDAQ data and is not 

designed to permit unfair 

discrimination between them. 

NASDAQ’s proposal to increase the 

Level 2 fee by $5 from $45 to $50 for 

display usage based upon direct or 

indirect access, or for non-display usage 

based upon indirect access only, is also 

consistent with the Act in that it reflects 

an equitable allocation of reasonable 

fees. The Commission has long 

recognized the fair and equitable and 

not unreasonably discriminatory nature 

of assessing different fees for 

Professional and Non-Professional Users 

of the same data. NASDAQ also believes 

it is equitable to assess a higher fee per 

Professional User than to an ordinary 

Non-Professional User due to the 

enhanced flexibility, lower overall costs 

and value that it offers Distributors. 

In adopting Regulation NMS, the 

Commission granted self-regulatory 

organizations and broker-dealers 

increased authority and flexibility to 

offer new and unique market data to the 

public. 

The Commission concluded that 

Regulation NMS—by deregulating the 

market in proprietary data—would itself 

further the Act’s goals of facilitating 

efficiency and competition: 

[E]fficiency is promoted when broker-dealers 

who do not need the data beyond the prices, 

sizes, market center identifications of the 

NBBO and consolidated last sale information 

are not required to receive (and pay for) such 

data. The Commission also believes that 

efficiency is promoted when broker-dealers 

may choose to receive (and pay for) 

additional market data based on their own 

internal analysis of the need for such data.5

By removing ‘‘unnecessary regulatory 

restrictions’’ on the ability of exchanges 

to sell their own data, Regulation NMS 

advanced the goals of the Act and the 

principles reflected in its legislative 

history. If the free market should 

determine whether proprietary data is 

sold to broker-dealers at all, it follows 

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