Federal Register / Vol. 80, No. 11 / Friday, January 16, 2015 / Notices 2457 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 73671 

(Nov. 21, 2014), 79 FR 70900 (Nov. 28, 2014) 

(‘‘Notice’’). 

4See anonymous comment submitted through the 

Commission’s Internet comment form on December 

19, 2014. 

5Current Rule 311(f) permits the Exchange to 

approve ‘‘entities that have characteristics 

essentially similar to corporations, partnerships, or 

both’’ as a member organization ‘‘on such terms and 

conditions as the Exchange may prescribe.’’ 

6Rule 311(b)(2) and (b)(3) currently impose the 

same requirement on the relevant control persons 

at corporations and partnerships, respectively. 

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, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 8 and Rule 19b– 

4(f)(6) 9 thereunder. 

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 will institute proceedings 

to determine whether the proposed rule 

change 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 email to rule-comments@

sec.gov. Please include File Number SR– 

C2–2014–028 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–C2–2014–028. 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 Number SR–C2– 

2014–028 and should be submitted on 

or before February 6, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00624 Filed 1–15–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74036; File No. SR– 

NYSEMKT–2014–97] 

Self-Regulatory Organizations; NYSE 

MKT LLC; Order Approving Proposed 

Rule Change Amending Rules 311— 

Equities and 313—Equities To Add 

Limited Liability Companies as Eligible 

Member Organizations and Delineate 

the Information Limited Liability 

Companies Must Submit to the 

Exchange as Part of the Membership 

Process; Eliminate the Requirement 

That a Member Corporation Be Created 

or Organized, and Maintain Its 

Principal Place of Business, in the 

United States; and Make Additional 

Related Amendments To Update Its 

Membership Rules 

January 12, 2015. 

I. Introduction 

On November 12, 2014, NYSE MKT 

LLC (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) 

filed with the Securities and Exchange 

Commission (the ‘‘Commission’’) 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a 

proposal to amend NYSE MKT Rules 

311—Equities (‘‘Rule 311’’) and 313— 

Equities (‘‘Rule 313’’) to add limited 

liability companies (‘‘LLCs’’) to the 

types of eligible member organizations 

and delineate the information LLCs 

must submit to the Exchange as part of 

the membership process; eliminate the 

requirement that a member corporation 

be created or organized, and maintain 

its principal place of business, in the 

United States; and make additional 

related amendments to update its 

membership rules. The proposed rule 

change was published for comment in 

the Federal Register on November 28, 

2014.3 The Commission received one 

comment on the proposal.4 This order 

approves the proposed rule change. 

II. Description of the Proposal 

A. Rule 311 

NYSE MKT Rule 311 governs the 

formation and approval of member 

organizations. The Exchange proposes 

to revise Rule 311 to explicitly provide 

for LLCs to apply to become member 

organizations and eliminate the 

requirement that a member corporation 

be created or organized, and maintain 

its principal place of business, in the 

United States. 

The Exchange’s membership rules 

currently provide for member 

organizations to be corporations or 

partnerships, but have not explicitly 

provided for LLCs.5 The Exchange 

proposes to add LLCs to the types of 

potential member organizations and 

require LLCs to meet the same 

requirements currently applicable to 

partnerships and corporations set forth 

in Rule 311(b). As part of the proposed 

revision, the Exchange seeks to add a 

new section (4) to Rule 311(b) requiring 

every member of an LLC to be a 

member, principal executive, or 

approved person.6 The Exchange also 

proposes to amend current Rule 

311(b)(6) to reflect that proposed LLC 

member organizations must, like 

corporations and partnerships, also 

comply with any additional 

requirements as the rules of the 

Exchange may prescribe. In addition, 

the Exchange proposes to add new 

Supplementary Material .16 to Rule 311 

to specify that LLC applicants for 

Exchange membership are subject to 

Rule 313.24 regarding the submission of 

copies of proposed or existing limited 


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2458 Federal Register / Vol. 80, No. 11 / Friday, January 16, 2015 / Notices 

7The first sentence of Rule 311(f) also provides 

that every member firm organization shall be a 

partnership or corporation. This statement is 

redundant to Rule 311(b), which the Exchange is 

amending to add LLCs. Accordingly, the Exchange 

proposes to delete the first sentence of Rule 311(f) 

in its entirety. 

8See 17 CFR 240.15a-6 and Commission Guide to 

Broker-Dealer Registration, Division of Trading and 

Markets, available at http://www.sec.gov/divisions/ 

marketreg/bdguide.htm (foreign broker-dealers that, 

from the outside of the United States, induce or 

attempt to induce securities transactions by any 

person in the United States, or that use the means 

or instrumentalities of interstate commerce in the 

United States for this purpose, must register as 

broker-dealers with the Commission). 

9See, e.g., NASD Membership and Registration 

Rules (1000 Series). NASD Rule 1090 imposes 

specific requirements on members that do not 

maintain an office in the United States responsible 

for preparing and maintaining financial and other 

reports required to be filed with the SEC and the 

Exchange, which the Exchange proposes to import 

into Rule 313. See infra note 10 and accompanying 

text. See also BATS Exchange, Inc. Rules 2.3, 2.5 

and 2.6. 

10The Exchange is not proposing to adopt a rule 

similar to NASD Rule 1090(d), which requires 

foreign members to ‘‘utilize, either directly or 

indirectly, the services of a broker/dealer registered 

with the Commission, a bank or a clearing agency 

registered with the Commission located in the 

United States in clearing all transactions involving 

members of the Association, except where both 

parties to a transaction agree otherwise.’’ The 

Exchange agrees with FINRA, which similarly 

recommended skipping paragraph (d) as part of its 

contemplated adoption of NASD Rule 1090, that the 

provision is ‘‘outdated’’ and that clearing 

arrangements are better addressed by FINRA Rule 

4311 (Carrying Agreements). See FINRA Regulatory 

Notice 13–29 at 27 (Sept. 2013). FINRA Rule 4311 

governs the requirements applicable to members 

when entering into agreements for the carrying of 

any customer accounts in which securities 

transactions can be effected. 

liability company documents and other 

agreements. 

The Exchange also proposes to amend 

Rule 311(f) to eliminate the geographic 

limitation on incorporation and 

domicile of corporation members. The 

first sentence of Rule 311(f) currently 

provides that every member corporation 

be a corporation ‘‘created or organized 

under the laws of, and shall maintain its 

principal place of business in, the 

United States or any State thereof.’’ 7

The Exchange does not believe that the 

Exchange’s restriction on whether 

foreign entities may be a member 

organization is consistent with either 

federal rules or those of other selfregulatory organizations (‘‘SRO’’). The 

Exchange states that rules promulgated 

pursuant to the Act require, under 

certain circumstances, a foreign brokerdealer to register with the Commission.8

The Exchange also states that other 

SROs, including the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’), 

do not require their members to be 

domiciled in the United States.9

The Exchange believes that the 

current restriction in Rule 311(f) puts it 

at a competitive disadvantage because it 

restricts foreign broker-dealers that are 

registered with the Commission and are 

members of another SRO from also 

becoming Exchange member 

organizations. The Exchange notes that 

its rules already require member 

organizations to meet prerequisites as 

specified in Rule 2(b). Specifically, 

regardless of corporate form, all member 

organizations must be registered brokerdealers that are members of FINRA or 

another registered securities exchange. 

If a registered broker-dealer transacts 

business with public customers or 

conducts business on the Floor of the 

Exchange, such member organization 

must be a member of FINRA. 

The Exchange further notes that a 

member organization will be subject to 

regulatory examination and jurisdiction 

for misconduct whether or not it is 

based in the United States. However, for 

the avoidance of doubt, as discussed 

below, the Exchange proposes to add 

supplementary material to Rule 313 

based on NASD Rule 1090 that imposes 

certain requirements on foreign 

members that do not maintain an office 

in the United States. 

B. Rule 313 

NYSE MKT Rule 313 sets forth certain 

corporate or partnership documents that 

each member organization must submit 

to enter into and continue in NYSE 

membership. The Rule also sets forth 

certain restrictions on capital 

withdrawals and distributions 

applicable to member corporations and 

partnerships. The Exchange proposes to 

amend Rule 313 to delineate the types 

of documents that LLCs must submit 

that, as noted, mirror the requirements 

currently in place for member 

corporations and partnerships. 

First, the Exchange proposes to add a 

subsection (d) to Rule 313 requiring all 

articles of organization and operating 

documents for LLCs to be submitted for 

Exchange approval prior to becoming 

effective. Relatedly, the Exchange 

proposes to add Supplementary 

Material .24 setting forth that existing 

LLCs must promptly submit certified 

copies (to the extent possible) of articles 

of organization and operating 

agreements to the Exchange. 

Second, the Exchange proposes to add 

Supplementary Material .25 providing 

restrictions on capital withdrawals by 

LLC members that are substantially the 

same as those applicable to corporations 

and partnerships. The Supplementary 

Material would provide that the capital 

contribution of any LLC member may 

not be withdrawn on less than six 

months’ written notice of withdrawal 

given no sooner than six months after 

such contribution was first made 

without the prior written approval of 

the Exchange. The Supplementary 

Material would also specify that each 

member firm shall promptly notify the 

Exchange of the receipt of any notice of 

withdrawal of any part of a member’s 

capital contribution or if any 

withdrawal is not made because 

prohibited under the provisions of Rule 

15c3–1 under the Act. 

Third, the Exchange proposes to add 

Supplementary Material .26 providing 

that LLCs not organized under the laws 

of New York State must subject 

themselves to the following restrictions: 

No distributions shall be declared or 

paid that impair the LLC’s capital; and 

no distribution of assets shall be made 

to any member unless the value of the 

LLC’s assets remaining after such 

payment or distribution is at least equal 

to the aggregate of its debts and 

liabilities, including capital. These 

proposed restrictions are based on 

existing restrictions applicable to 

member corporations and partnerships. 

In addition, as noted above, the 

Exchange proposes to add new 

Supplementary Material .27 to Rule 313 

specifying the requirements applicable 

to Foreign Member Organizations. The 

proposed new rule text would adopt, 

without substantive change, paragraphs 

(a), (b), and (c) of NASD Rule 1090 

(Foreign Members), which impose 

specific requirements on FINRA 

members that do not maintain an office 

in the United States responsible for 

preparing and maintaining financial and 

other reports required to be filed by the 

SEC and FINRA.10 As proposed, foreign 

member organizations that do not 

maintain an office in the United States 

responsible for preparing and 

maintaining financial and other reports 

required to be filed with the 

Commission and the Exchange would be 

required to: (1) Prepare all such reports, 

and maintain a general ledger chart of 

account and any description thereof, in 

English and U.S. dollars; (2) reimburse 

the Exchange or its representatives for 

expenses incurred in connection with 

examinations of the member 

organization to the extent that such 

expenses exceed the cost of examining 

a member organization located within 

the continental United States in the 

geographic location most distant from 

the Exchange’s principal office or, in 

such other amount as the Exchange may 

deem to be an equitable allocation of 

such expenses; and (3) ensure the 

availability of an individual fluent in 

English and knowledgeable in securities 

and financial matters to assist 


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Federal Register / Vol. 80, No. 11 / Friday, January 16, 2015 / Notices 2459 

11See also infra note 12. 

12FINRA Rule 4110 (Capital Compliance) 

contains similar prohibitions on capital 

withdrawals by FINRA members without requiring 

that the prohibitions be reflected in a firm’s 

partnership articles or requiring a legal opinion that 

the member has made the prohibitions legally 

effective. See FINRA Rule 4110(c)(1) (‘‘No equity 

capital of a member may be withdrawn for a period 

of one year from the date such equity capital is 

contributed, unless otherwise permitted by FINRA 

in writing.’’). 

13Under Rule 0—Equities, references to the 

Exchange also refer to FINRA staff and FINRA 

departments acting on behalf of the Exchange 

pursuant to a Regulatory Services Agreement 

(‘‘RSA’’). FINRA currently provides member 

application proceedings services to the Exchange 

pursuant to an RSA. 

14See supra note 4. 

15 In approving the proposed rule change, the 

Commission has considered the proposed rule 

change’s impact on efficiency, competition, and 

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

16 15 U.S.C. 78f(b)(5). 

representatives of the Exchange during 

examinations. 

The Exchange also proposes to 

eliminate certain restrictions, which the 

Exchange considers redundant, on 

member organizations and prospective 

member organizations organized as 

partnerships and corporations. The 

Exchange proposes to eliminate the 

requirement in Rule 313.11 that the 

partnership articles of each member 

firm provide that capital withdrawals by 

partners cannot be made without the 

prior written approval of the Exchange. 

Rule 313.11 already requires the 

Exchange’s prior written approval for 

any such capital withdrawals, and 

member organizations need to monitor 

for and comply with the prohibition, 

including whether particular 

withdrawals violate net capital 

requirements. The Exchange believes 

that because Exchange rules already 

govern this behavior, a partnership 

seeking approval as a member 

organization would not need to amend 

its partnership articles to reflect this 

existing rule requirement.11

Further, the Exchange proposes to 

eliminate the requirement in Rule 

313.20 that prospective member 

corporations submit an opinion of 

counsel stating, among other things, that 

the corporation is duly organized and 

existing, that its stock is validly issued 

and outstanding, and that the 

restrictions and provisions required by 

the Exchange on the transfer, issuance, 

conversion and redemption of its stock 

have been made legally effective. 

Corporate members are required under 

the Rule to submit relevant corporate 

documents, including articles of 

incorporation, that contain the same 

information required in the opinion of 

counsel. The Exchange represents that 

requiring a legal opinion attesting to 

facts contained in a corporation’s public 

filings is redundant and, given the 

expense, potentially a disincentive to 

smaller entities applying for Exchange 

membership. 

Similarly, the Exchange proposes to 

remove the requirement in Rule 313.23 

that the opinion of counsel submitted to 

the Exchange at the time the corporation 

applies for approval under Rule 313.20 

state the extent to which the corporation 

has made the following prohibitions 

legally effective: The prohibition on 

declaring or paying a dividend that 

impairs the capital of the corporation 

and the prohibition on distributing 

assets to any stockholder unless the 

value of the corporate assets remaining 

after such payment or distribution is at 

least equal to the aggregate of its debts 

and liabilities, including capital. Rule 

313.23 would continue to prohibit 

corporation members from declaring or 

paying dividends or distributing 

corporate assets that impair the 

corporation’s capital, and member 

corporations would not be relieved of 

the obligation to monitor and enforce 

these prohibitions. The Exchange 

believes that requiring these 

representations in a separate legal 

opinion is redundant and serves no 

necessary regulatory or other purpose.12

Finally, the Exchange proposes to 

make certain miscellaneous 

amendments to Rule 313. Specifically, 

the Exchange proposes to replace 

outdated references to ‘‘Regulation and 

Surveillance’’ with ‘‘the Exchange’’ in 

Rules 313.10 and 313.20.13 Similarly, 

the Exchange proposes to replace 

outdated references to ‘‘photostatic’’ 

copies in Rules 313.10 and 313.20 in 

connection with the submission of 

documents to the Exchange and replace 

them with ‘‘electronically or 

mechanically reproduced.’’ 

As noted above, the Commission 

received only one comment on the 

proposed rule change.14 The comment 

expressed the view that the proposed 

rule change was a ‘‘good idea’’ but did 

not elaborate. 

III. Discussion and Commission 

Findings 

After carefully considering the 

proposal and the one comment 

submitted, the Commission finds that 

the proposed rule change is consistent 

with the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.15 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,16 which requires, 

among other things, that the rules of a 

national securities exchange be 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, 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 Commission agrees with the 

Exchange that adding LLCs to the list of 

eligible member organizations would 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system by 

expanding the types of organizational 

forms a member organization may take. 

The Exchange also believes that 

permitting LLCs to become member 

organizations subject to the same 

restrictions and requirements currently 

applicable to corporations and 

partnerships also protects investors and 

the public interest by holding LLCs to 

the same high standards. 

In addition, permitting non-United 

States-based registered broker-dealers 

that are members of FINRA or another 

registered securities exchange and that 

do not have their principal place of 

business in the United States to become 

Exchange member organizations would 

remove impediments to and perfect the 

mechanism of a free and open market by 

removing geographic restrictions on 

Exchange membership that are not 

required by FINRA or other exchanges. 

Broadening the Exchange membership 

pool by facilitating the participation of 

additional foreign-based U.S. registered 

broker-dealers would benefit investors 

and the public interest by increasing 

market participation and depth at the 

Exchange. Moreover, adoption of 

specific requirements for foreign 

members that do not maintain an office 

in the United States based on NASD 

Rule 1090 would further assure that 

foreign Exchange members, once 

approved, remain subject to regulatory 

examination and jurisdiction. 

In addition, updating the Exchange’s 

rules to remove requirements that the 

Exchange believes are redundant—that a 

member firm’s partnership articles 

provide that capital withdrawals by 

partners cannot be made without the 

prior written approval of the Exchange, 

that prospective member corporations 

submit an opinion of counsel reciting 

facts contained in its public filings, and 

that certain prohibitions have been 

made legally effective—would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system by 

ensuring that potential member 

organizations, persons subject to the 

Exchange’s jurisdiction, regulators, and 


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2460 Federal Register / Vol. 80, No. 11 / Friday, January 16, 2015 / Notices 

17 15 U.S.C. 78s(b)(2). 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3NOM is a facility of NASDAQ. 

4The Exchange, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’), and NASDAQ OMX BX, Inc. (‘‘BX’’) are 

self-regulatory organizations (‘‘SROs’’) that are 

wholly owned subsidiaries of The NASDAQ OMX 

Group, Inc. (‘‘NASDAQ OMX’’). The Exchange, 

NOM (a facility of the Exchange), BX, BX Options 

(a facility of BX), Phlx, and PSX (a facility of Phlx) 

(together with the Exchange known as the 

‘‘NASDAQ Markets’’), are independently filing 

proposals to conform their respective Extranet 

Access Fee rules to NASDAQ Rule 7025. 

5As defined in proposed NOM Chapter XV, 

Section 12, a ‘‘Customer Premises Equipment 

Configuration’’ means any line, circuit, router 

package, or other technical configuration used by an 

extranet provider to provide a direct access 

connection to Nasdaq market data feeds to a 

recipient’s site. 

6See Securities Exchange Act Release Nos. 50483 

(October 1, 2004), 69 FR 60448 (October 8, 2004) 

(SR–NASD–2004–118) (establishing the Extranet 

Access Fee on NASDAQ); and 71199 (December 30, 

2013), 79 FR 686 (January 6, 2014) (SR–NASD [sic]– 

2013–159) (notice of filing and immediate 

effectiveness increasing the Extranet Access Fee to 

$1,000). 

7See Securities Exchange Act Release Nos. 59615 

(March 20, 2009), 74 FR 14604 (March 31, 2009) 

(SR–BX–2009–005) (establishing the Extranet 

Access Fee on BX); and 71841 (April 1, 2014), 79 

FR 19129 (April 7, 2014) (SR–BX–2014–015) (notice 

of filing and immediate effectiveness describing 

that the Extranet Access Fee is $750). See also 

Securities Exchange Act Release No. 71236 (January 

6, 2014), 79 FR 1906 (January 10, 2014) (SR–Phlx– 

2014–01) (notice of filing and immediate 

effectiveness establishing the Extranet Access Fee 

on PSX, and describing that no fee is charged at the 

time of the filing). 

8As noted, the NASDAQ Markets are 

independently filing proposals to conform their 

respective Extranet Access Fee. 

9However, the proposed Section 12 language 

does not, because it deals with options, indicate 

that consolidated data includes data disseminated 

by the UTP SIP (as noted in NASDAQ Rule 7025). 

the public could more easily navigate 

the Exchange’s rulebook and better 

understand what obligations attach and 

when. Further, updating the Exchange’s 

rules to remove what the Exchange 

considers redundant requirements also 

would protect investors as well as the 

public interest by providing 

transparency and reducing potential 

confusion regarding the Exchange 

membership process that may result 

from having what the Exchange 

characterizes as obsolete rules and 

outdated guidelines in the Exchange’s 

rulebook. For the same reasons, 

updating the Exchange’s rules to remove 

requirements that the Exchange 

considers outdated would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and is 

equally designed to protect investors as 

well as the public interest. 

Based on the foregoing, the 

Commission finds the proposed rule 

change is consistent with the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,17 that the 

proposed rule change (SR–NYSEMKT– 

2014–97) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00579 Filed 1–15–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74040; File No. SR– 

NASDAQ–2015–003] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Regarding the 

Extranet Access Fee 

January 13, 2015. 

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 January 5, 

2015, The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the proposed rule change as described 

in Items I, II, and III below, which Items 

have been prepared by 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 Substance of 

the Proposed Rule Change 

NASDAQ proposes to add new 

NASDAQ Options Market (‘‘NOM’’) 3

Chapter XV, Section 12 to the 

Exchange’s Options Pricing Schedule 

(‘‘Pricing Schedule’’), which includes 

description about the applicability of 

the Extranet Access Fee. This will 

conform the Exchange’s Pricing 

Schedule to that of other markets. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://

www.nasdaq.cchwallstreet.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. The text of 

these 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 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 proposal is to add 

new NOM Chapter XV, Section 12 

entitled ‘‘Extranet Access Fee’’ to the 

Pricing Schedule, which includes 

description about the applicability of 

the Extranet Access Fee. This will 

conform the Exchange’s Pricing 

Schedule to that of other markets.4

Specifically, the Exchange proposes to 

establish the Extranet Access Fee in 

proposed new NOM Chapter XV, 

Section 12 to indicate that certain nonExchange Customer Premises 

Equipment (‘‘CPE’’) Products shall be 

assessed a monthly access fee of $1,000 

per CPE. The Exchange also proposes to 

conform the Extranet Access Fee to that 

of another market, specifically NASDAQ 

Rule 7025, by also indicating that if an 

extranet provider uses multiple CPE 

Configurations 5 to provide market data 

feeds to any recipient the monthly fee 

shall apply to each such CPE 

Configuration; and that no Extranet 

Access Fee will be charged for 

connectivity to market data feeds 

containing only consolidated data. This 

proposal conforms the Extranet Access 

Fee in NOM Chapter XV, Section 12 to 

the equivalent fee in NASDAQ Rule 

7025. 

The Extranet Access Fee was 

introduced a decade ago on NASDAQ 

Rule 7025 as an equity fee.6 The 

Extranet Access Fee was introduced 

about five years ago in on BX and about 

year ago on PSX.7 By this proposal, the 

Exchange normalizes the cost and 

structure of its Extranet Access Fee on 

NOM to that of the equivalent decadeold NASDAQ fee.8

Proposed NOM Chapter XV, Section 

12 indicates the same fee as NASDAQ 

Rule 7025, namely $1,000 per CPE 

Configuration, and adds verbatim 

language from NASDAQ Rule 7025 that 

explains the application of the fee.9 As 

proposed, NOM Chapter XV, Section 12 

will read as follows: ‘‘Extranet providers 

that establish a connection with Nasdaq 

to offer direct access connectivity to 

market data feeds shall be assessed a 

monthly access fee of $1,000 per 


asabaliauskas on DSK5VPTVN1PROD with NOTICES