Document ID: SEC-2013-0662-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2013-04-08T04:00Z

[Federal Register Volume 78, Number 67 (Monday, April 8, 2013)]
[Notices]
[Pages 20967-20968]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-08093]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69271; File No. SR-NASDAQ-2013-056]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Eliminate a Fee for Use of FIX and OUCH Trading Ports for Testing

April 2, 2013.
    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 March 28, 2013, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASDAQ proposes to eliminate fees under Rules 7015(b) and (g), 
which are effective but not yet implemented, for subscription to FIX 
Trading Ports and OUCH Ports used for testing.
    The text of the proposed rule change is below. Proposed deletions 
are in brackets.
* * * * *

7015. Access Services

    The following charges are assessed by Nasdaq for connectivity to 
systems operated by NASDAQ, including the Nasdaq Market Center, the 
FINRA/NASDAQ Trade Reporting Facility, and FINRA's OTCBB Service. The 
following fees are not applicable to the NASDAQ Options Market LLC. For 
related options fees for Access Services refer to Chapter XV, Section 3 
of the Options Rules.
    (a) No change.
    (b) Financial Information Exchange (FIX)

------------------------------------------------------------------------
                   Ports                                Price
------------------------------------------------------------------------
FIX Trading Port..........................  $500/port/month *.
FIX Port for Services Other than Trading..  $500/port/month.
[FIX Trading Port for Testing Nasdaq will   [$300/port/month].
 assess the following fee for each FIX
 Trading Port assigned to an MPID that is
 in test mode in excess of one.].
------------------------------------------------------------------------

    (c)--(f) No change.
    (g) Other Port Fees
    Remote Multi-cast ITCH Wave Ports

----------------------------------------------------------------------------------------------------------------
                          Description                               Installation fee      Recurring  monthly fee
----------------------------------------------------------------------------------------------------------------
MITCH Wave Port at Secaucus, NJ...............................                   $2,500                   $7,500
MITCH Wave Port at Weehawken, NJ..............................                    2,500                    7,500
MITCH Wave Port at Newark, NJ.................................                    2,500                    7,500
----------------------------------------------------------------------------------------------------------------

    The following port fees shall apply in connection with the use of 
other trading telecommunication protocols:
     $500 per month for each port pair,* other than Multicast 
ITCH[supreg] data feed pairs, for which the fee is $1000 per month for 
software-based TotalView-ITCH or $2,500 per month for combined 
software- and hardware-based TotalView-ITCH.
     An additional $200 per month for each port used for 
entering orders or quotes over the Internet.
     An additional $600 per month for each port used for market 
data delivery over the Internet.
    [ $300 per port, per month for each OUCH Port assigned to 
an MPID that is in test mode in excess of one.]
    (h) No change.
    * Eligible for 25% discount under the Qualified Market Maker 
Program during a pilot period expiring on April 30, 2013.
* * * * *

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 Rules 7015(b) and (g) to eliminate the 
recently-effective,\3\ but not yet implemented, fees for member firm 
use of FIX Trading Ports and OUCH Ports, respectively, maintained in 
test mode. The fees were to be implemented on April 1, 2013 and this 
filing eliminates those fees prior to their implementation. As 
discussed in greater detail in the rule change adopting the fees,\4\ a 
FIX Trading Port and an OUCH Port are both connections to the NASDAQ 
trading system (collectively, ``Trading Ports''). Historically, a 
member firm was not charged a fee for any of its subscribed Trading 
Ports designated as in ``test mode.'' \5\ NASDAQ determined to assess

[[Page 20968]]

a fee for a member firm's Trading Ports in test mode in excess of one 
for each of a member firm's MPIDs in order to recoup costs associated 
with maintaining such ports. These costs include costs incurred 
maintaining servers and their physical location, monitoring order 
activity, and other support.
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    \3\ Securities Exchange Act Release No. 69211 (March 22, 2013) 
(SR-NASDAQ-2013-050).
    \4\ Id.
    \5\ When a member firm designates a Trading Port's status as in 
test mode, NASDAQ will not allow normal order activity to occur 
through the port but rather it limits all order activity to test 
ticker symbols. The purpose of test mode is to permit a member firm 
to test its connection to the trading system to ensure that its 
messages are received accurately by the Exchange and that there are 
no issues with its own systems.
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    Upon further consideration, NASDAQ determined not to assess fees 
for Trading Ports in test mode at this time based on business 
considerations. NASDAQ considered the potential impact on its business 
as compared to the anticipated revenue generated from such fees, and 
determined that not assessing the fees is a better decision at this 
juncture. Instead, NASDAQ is considering other means to encourage 
member firms to either use their Trading Ports in test mode or cancel 
them, such as contacting member firms with idle Trading Ports. 
Accordingly, NASDAQ is eliminating the fees, which became effective on 
March 22, 2013 and were to be implemented on April 1, 2013. Should 
NASDAQ determine once again that assessing fees for Trading Ports in 
test mode is appropriate, it will file a rule change to assess such 
fees.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \6\ in general, and with Section 6(b)(4) \7\ of the 
Act, in particular. The Exchange believes it is consistent with Section 
6(b)(4) of the Act because it provides for the equitable allocation of 
reasonable dues, fees and other charges among members and issuers and 
other persons using any facility or system which the Exchange operates 
or controls. The rule change eliminates fees that recently became 
effective, but have not yet been implemented. NASDAQ believes that the 
not-yet-implemented fees for Trading Ports in test mode are consistent 
with the Act for all the reasons stated in the filing with the 
Commission adopting such fees.\8\ Nonetheless, NASDAQ assessed the 
potential impact of the new fees on its member firms compared to the 
affect [sic] the fee might potentially have on the Exchange's business, 
and determined that assessing the fee at this juncture does not make 
sense from a business perspective. As noted, NASDAQ is exploring other 
means of encouraging the efficient use of Trading Ports in test mode, 
which will not involve assessing fees. Accordingly, NASDAQ will revert 
Rules 7015(b) and (g) back to their status prior to the fee change, so 
that all member firms with Trading Ports in test mode will not be 
assessed any fee whatsoever and NASDAQ will continue to incur the costs 
associated with supporting such ports.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ Supra note 3.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NASDAQ does not believe that the proposed rule change will result 
in any burden on competition at all. The proposed change merely 
eliminates fees that are effective, yet not yet implemented. 
Accordingly, the Exchange does not believe any analysis of burden on 
competition is necessary.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing change has become effective pursuant to Section 
19(b)(3)(A) of the Act,\9\ and paragraph (f) \10\ of Rule 19b-4, 
thereunder.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the 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-NASDAQ-2013-056 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2013-056. 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 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 NASDAQ. All comments received will be 
posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NASDAQ-2013-056, and should be submitted 
on or before April 29, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-08093 Filed 4-5-13; 8:45 am]
BILLING CODE 8011-01-P