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 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Notices 75221 

that the price at which such data is sold 

should be set by the market as well. 

Level 2 is precisely the sort of market 

data products that the Commission 

envisioned when it adopted Regulation 

NMS. 

The decision of the United States 

Court of Appeals for the District of 

Columbia Circuit in NetCoaliton v. SEC, 

615 F.3d 525 (D.C. Cir. 2010) 

(‘‘NetCoalition I’’), upheld the 

Commission’s reliance upon 

competitive markets to set reasonable 

and equitably allocated fees for market 

data. ‘‘In fact, the legislative history 

indicates that the Congress intended 

that the market system ‘evolve through 

the interplay of competitive forces as 

unnecessary regulatory restrictions are 

removed’ and that the SEC wield its 

regulatory power ‘in those situations 

where competition may not be 

sufficient,’ such as in the creation of a 

‘consolidated transactional reporting 

system.’ NetCoaltion I, at 535 (quoting 

H.R. Rep. No. 94–229, at 92 (1975), as 

reprinted in 1975 U.S.C.C.A.N. 321, 

323). 

NASDAQ believes that the allocation 

of the proposed fee is fair and equitable 

in accordance with Section 6(b)(4) of the 

Act, and not unreasonably 

discriminatory in accordance with 

Section 6(b)(5) of the Act. As described 

above, the proposed fee is based on 

pricing conventions and distinctions 

that exist in NASDAQ’s current fee 

schedule. These distinctions are each 

based on principles of fairness and 

equity that have helped for many years 

to maintain fair, equitable, and not 

unreasonably discriminatory fees, and 

that apply with equal or greater force to 

the current proposal. 

As described in greater detail below, 

if NASDAQ has calculated improperly 

and the market deems the proposed fees 

to be unfair, inequitable, or 

unreasonably discriminatory, firms can 

discontinue the use of their data 

because the proposed product is entirely 

optional to all parties. Firms are not 

required to purchase data and NASDAQ 

is not required to make data available or 

to offer specific pricing alternatives for 

potential purchases. NASDAQ can 

discontinue offering a pricing 

alternative (as it has in the past) and 

firms can discontinue their use at any 

time and for any reason (as they often 

do), including due to their assessment of 

the reasonableness of fees charged. 

NASDAQ continues to establish and 

revise pricing policies aimed at 

increasing fairness and equitable 

allocation of fees among Subscribers. 

NASDAQ believes that periodically it 

must adjust the Subscriber fees to reflect 

market forces. NASDAQ believes it is an 

appropriate time to adjust this fee to 

more accurately reflect the investments 

made to enhance this product through 

capacity upgrades and regulatory data 

sets added. This also reflects that the 

market for this information is highly 

competitive and continually evolves as 

products develop and change. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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. 

Notwithstanding its determination that 

the Commission may rely upon 

competition to establish fair and 

equitably allocated fees for market data, 

the NetCoalition court found that the 

Commission had not, in that case, 

compiled a record that adequately 

supported its conclusion that the market 

for the data at issue in the case was 

competitive. NASDAQ believes that a 

record may readily be established to 

demonstrate the competitive nature of 

the market in question. 

There is intense competition between 

trading platforms that provide 

transaction execution and routing 

services and proprietary data products. 

Transaction execution and proprietary 

data products are complementary in that 

market data is both an input and a 

byproduct of the execution service. In 

fact, market data and trade execution are 

a paradigmatic example of joint 

products with joint costs. Data products 

are valuable to many end Subscribers 

only insofar as they provide information 

that end Subscribers expect will assist 

them or their customers in making 

trading decisions. 

The costs of producing market data 

include not only the costs of the data 

distribution infrastructure, but also the 

costs of designing, maintaining, and 

operating the exchange’s transaction 

execution platform and the cost of 

regulating the exchange to ensure its fair 

operation and maintain investor 

confidence. The total return that a 

trading platform earns reflects the 

revenues it receives from both products 

and the joint costs it incurs. Moreover, 

an exchange’s customers view the costs 

of transaction executions and of data as 

a unified cost of doing business with the 

exchange. A broker-dealer will direct 

orders to a particular exchange only if 

the expected revenues from executing 

trades on the exchange exceed net 

transaction execution costs and the cost 

of data that the broker-dealer chooses to 

buy to support its trading decisions (or 

those of its customers). The choice of 

data products is, in turn, a product of 

the value of the products in making 

profitable trading decisions. If the cost 

of the product exceeds its expected 

value, the broker-dealer will choose not 

to buy it. Moreover, as a broker-dealer 

chooses to direct fewer orders to a 

particular exchange, the value of the 

product to that broker-dealer decreases, 

for two reasons. First, the product will 

contain less information, because 

executions of the broker-dealer’s orders 

will not be reflected in it. Second, and 

perhaps more important, the product 

will be less valuable to that brokerdealer because it does not provide 

information about the venue to which it 

is directing its orders. Data from the 

competing venue to which the brokerdealer is directing orders will become 

correspondingly more valuable. 

Thus, an increase in the fees charged 

for either transactions or data has the 

potential to impair revenues from both 

products. ‘‘No one disputes that 

competition for order flow is ‘fierce’.’’ 

NetCoalition at 24. However, the 

existence of fierce competition for order 

flow implies a high degree of price 

sensitivity on the part of broker-dealers 

with order flow, since they may readily 

reduce costs by directing orders toward 

the lowest-cost trading venues. A 

broker-dealer that shifted its order flow 

from one platform to another in 

response to order execution price 

differentials would both reduce the 

value of that platform’s market data and 

reduce its own need to consume data 

from the disfavored platform. Similarly, 

if a platform increases its market data 

fees, the change will affect the overall 

cost of doing business with the 

platform, and affected broker-dealers 

will assess whether they can lower their 

trading costs by directing orders 

elsewhere and thereby lessening the 

need for the more expensive data. 

Analyzing the cost of market data 

distribution in isolation from the cost of 

all of the inputs supporting the creation 

of market data will inevitably 

underestimate the cost of the data. Thus, 

because it is impossible to create data 

without a fast, technologically robust, 

and well-regulated execution system, 

system costs and regulatory costs affect 

the price of market data. It would be 

equally misleading, however, to 

attribute all of the exchange’s costs to 

the market data portion of an exchange’s 

joint product. Rather, all of the 

exchange’s costs are incurred for the 

unified purposes of attracting order 

flow, executing and/or routing orders, 

and generating and selling data about 

market activity. The total return that an 

exchange earns reflects the revenues it 

receives from the joint products and the 

total costs of the joint products. 

mstockstill on DSK4VPTVN1PROD with NOTICES

75222 Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Notices 

Competition among trading platforms 

can be expected to constrain the 

aggregate return each platform earns 

from the sale of its joint products, but 

different platforms may choose from a 

range of possible, and equally 

reasonable, pricing strategies as the 

means of recovering total costs. For 

example, some platforms may choose to 

pay rebates to attract orders, charge 

relatively low prices for market 

information (or provide information free 

of charge) and charge relatively high 

prices for accessing posted liquidity. 

Other platforms may choose a strategy 

of paying lower rebates (or no rebates) 

to attract orders, setting relatively high 

prices for market information, and 

setting relatively low prices for 

accessing posted liquidity. In this 

environment, there is no economic basis 

for regulating maximum prices for one 

of the joint products in an industry in 

which suppliers face competitive 

constraints with regard to the joint 

offering. This would be akin to strictly 

regulating the price that an automobile 

manufacturer can charge for car sound 

systems despite the existence of a highly 

competitive market for cars and the 

availability of after-market alternatives 

to the manufacturer-supplied system. 

The market for market data products 

is competitive and inherently 

contestable because there is fierce 

competition for the inputs necessary to 

the creation of proprietary data and 

strict pricing discipline for the 

proprietary products themselves. 

Numerous exchanges compete with 

each other for listings, trades, and 

market data itself, providing virtually 

limitless opportunities for entrepreneurs 

who wish to produce and distribute 

their own market data. This proprietary 

data is produced by each individual 

exchange, as well as other entities, in a 

vigorously competitive market. 

Broker-dealers currently have 

numerous alternative venues for their 

order flow, including thirteen selfregulatory organization (‘‘SRO’’) 

markets, as well as internalizing brokerdealers (‘‘BDs’’) and various forms of 

alternative trading systems (‘‘ATSs’’), 

including dark pools and electronic 

communication networks (‘‘ECNs’’). 

Each SRO market competes to produce 

transaction reports via trade executions, 

and two FINRA-regulated Trade 

Reporting Facilities (‘‘TRFs’’) compete 

to attract internalized transaction 

reports. Competitive markets for order 

flow, executions, and transaction 

reports provide pricing discipline for 

the inputs of proprietary data products. 

The large number of SROs, TRFs, BDs, 

and ATSs that currently produce 

proprietary data or are currently capable 

of producing it provides further pricing 

discipline for proprietary data products. 

Each SRO, TRF, ATS, and BD is 

currently permitted to produce 

proprietary data products, and many 

currently do or have announced plans to 

do so, including NASDAQ, New York 

Stock Exchange LLC (‘‘NYSE’’), NYSE 

MKT LLC, NYSE Arca LLC, and BATS 

Exchange, Inc. (‘‘BATS’’). 

Any ATS or BD can combine with any 

other ATS, BD, or multiple ATSs or BDs 

to produce joint proprietary data 

products. Additionally, order routers 

and market data vendors can facilitate 

single or multiple broker-dealers’ 

production of proprietary data products. 

The potential sources of proprietary 

products are virtually limitless. 

The fact that proprietary data from 

ATSs, BDs, and vendors can by-pass 

SROs is significant in two respects. 

First, non-SROs can compete directly 

with SROs for the production and sale 

of proprietary data products, as BATS 

and Arca did before registering as 

exchanges by publishing data on the 

Internet. Second, because a single order 

or transaction report can appear in an 

SRO proprietary product, a non-SRO 

proprietary product, or both, the data 

available in proprietary products is 

exponentially greater than the actual 

number of orders and transaction 

reports that exist in the marketplace. 

Market data vendors provide another 

form of price discipline for proprietary 

data products because they control the 

primary means of access to end 

Subscribers. Vendors impose price 

restraints based upon their business 

models. For example, vendors such as 

Bloomberg and Thomson Reuters that 

assess a surcharge on data they sell may 

refuse to offer proprietary products that 

end Subscribers will not purchase in 

sufficient numbers. Internet portals, 

such as Google, impose a discipline by 

providing only data that will enable 

them to attract ‘‘eyeballs’’ that 

contribute to their advertising revenue. 

Retail broker-dealers, such as Schwab 

and Fidelity, offer their customers 

proprietary data only if it promotes 

trading and generates sufficient 

commission revenue. Although the 

business models may differ, these 

vendors’ pricing discipline is the same: 

They can simply refuse to purchase any 

proprietary data product that fails to 

provide sufficient value. NASDAQ and 

other producers of proprietary data 

products must understand and respond 

to these varying business models and 

pricing disciplines in order to market 

proprietary data products successfully. 

In addition to the competition and 

price discipline described above, the 

market for proprietary data products is 

also highly contestable because market 

entry is rapid, inexpensive, and 

profitable. The history of electronic 

trading is replete with examples of 

entrants that swiftly grew into some of 

the largest electronic trading platforms 

and proprietary data producers: 

Archipelago, Bloomberg Tradebook, 

Island, RediBook, Attain, TracECN and 

BATS Trading. A proliferation of dark 

pools and other ATSs operate profitably 

with fragmentary shares of consolidated 

market volume. 

Regulation NMS, by deregulating the 

market for proprietary data, has 

increased the contestability of that 

market. While broker-dealers have 

previously published their proprietary 

data individually, Regulation NMS 

encourages market data vendors and 

broker-dealers to produce proprietary 

products cooperatively in a manner 

never before possible. Multiple market 

data vendors already have the capability 

to aggregate data and disseminate it on 

a profitable scale, including Bloomberg, 

and Thomson Reuters. 

The vigor of competition for 

information is significant. NASDAQ has 

made a determination to adjust the fees 

associated with this product in order to 

reflect more accurately the value of its 

products and the investments made to 

enhance them, as well as to keep pace 

with changes in the industry and 

evolving customer needs. This product 

is entirely optional and is geared 

towards attracting new customers, as 

well as retaining existing customers. 

The Exchange has witnessed 

competitors creating new products and 

innovative pricing in this space over the 

course of the past year. NASDAQ 

continues to see firms challenge its 

pricing on the basis of the Exchange’s 

explicit fees being higher than the zeropriced fees from other competitors such 

as BATS. In all cases, firms make 

decisions on how much and what types 

of data to consume on the basis of the 

total cost of interacting with NASDAQ 

or other exchanges. Of course, the 

explicit data fees are but one factor in 

a total platform analysis. Some 

competitors have lower transactions fees 

and higher data fees, and others are vice 

versa. The market for this information is 

highly competitive and continually 

evolves as products develop and 

change. 

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. 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Notices 75223 

6 15 U.S.C. 78s(b)(3)(a)[sic](ii). 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Data Package is also commonly referred to 

as the Report Center. 

4See Securities Exchange Act Release No. 66078 

(January 3, 2012), 77 FR 1125 (January 9, 2012) (SR– 

NASDAQ–2011–173). 

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.6 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, as amended, 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– 

NASDAQ–2014–111 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 

Number SR–NASDAQ–2014–111. 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 also will be available for 

inspection and copying at the principal 

offices 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–NASDAQ–2014–111, and 

should be submitted on or before 

January 7, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29497 Filed 12–16–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73815; File No. SR– 

NASDAQ–2014–121] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify 

NASDAQ Rule 7021 Fees 

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 December 

5, 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 7021 for 

the NasdaqTrader.com Trading and 

Compliance Data Package (‘‘Data 

Package’’). 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 

7021 to increase the fee assessed for 

subscription to the Data Package and 

eliminate a little-used report.3 The Data 

Package allows member firms to obtain 

information regarding their own 

historical quoting and trading activity 

on NASDAQ. The Data Package also 

provides member firms with 

information concerning their 

compliance with NASDAQ and FINRA 

rules. When NASDAQ last increased the 

fees for the Data Package in February 

2012,4 the service provided subscribers 

the following reports: Monthly 

Compliance Report Cards, which 

outline a firm’s own compliance with 

various FINRA rules; Monthly 

Summaries, which provide monthly 

trading volume statistics for the top 50 

market participants broken down by 

industry sector, security or type of 

trading; and Historical Research 

Reports, which provide a variety of 

historical trading data such as a market 

maker’s quote updates, order activity, 

and detailed trade reporting 

information. Additionally, NASDAQ 

offered subscribers the ability to receive 

the detailed trade report (Equity Trade 

Journal) via a secure FTP dissemination 

as an option. These reports, which 

continue to be offered as part of Data 

Package, are based on the subscribing 

member firm’s historical trade 

mstockstill on DSK4VPTVN1PROD with NOTICES