Document ID: SEC-2010-1729-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2010-11-12T05:00Z

[Federal Register Volume 75, Number 218 (Friday, November 12, 2010)]
[Notices]
[Pages 69502-69503]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-28466]

[[Page 69502]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63258; File No. SR-NASDAQ-2010-145]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the Fees Assessed for Use of the Testing Facility

November 5, 2010.
    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 October 29, 2010, 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.
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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 the 
Substance of the Proposed Rule Change

    NASDAQ proposes to amend the fees assessed for use of the Testing 
Facility. NASDAQ will implement the proposed rule change on November 1, 
2010.
    The text of the proposed rule change is below. Proposed new 
language is italicized; proposed deletions are in brackets.

7030. Other Services

    (a)-(c) No change.
    (d) Nasdaq Testing Facility
    (1) The following fees are assessed for access to the Nasdaq 
Testing Facility:
    (A) Subscribers that conduct tests of the[ir] [Nasdaq access 
protocols connection (which includes] computer-to-computer interface 
(CTCI)[,] and the Financial Information Exchange (FIX) interface to ACT 
and ACES access protocols[, and Nasdaq Information Exchange (QIX) 
interface) or market data vendor feeds] through the Nasdaq Testing 
Facility (NTF) shall pay the following charges:

$285/hour--For Active Connection testing [using current Nasdaq access 
protocols] during the normal operating hours of the NTF;
No Charge--For Idle Connection testing [using current Nasdaq access 
protocols];
$333/hour--For Active Connection testing [using current Nasdaq access 
protocols] at all times other than the normal operating hours of the 
NTF.
     (B) Subscribers that conduct tests of all Nasdaq access protocol 
connections not included in paragraph (A) above or of market data 
vendor feeds through the Nasdaq Testing Facility shall pay $300 per 
port, per month.
    (2) No change.
    (3) The foregoing [hourly] fees shall not apply to [market data 
vendor feed testing, or] testing occasioned by:
    (A) New or enhanced services and/or software provided by Nasdaq;
    (B) Modifications to software and/or services initiated by Nasdaq 
in response to a contingency; or
    (C) Testing by a subscriber of a Nasdaq service that the subscriber 
has not used previously, except if more than 30 days have elapsed since 
the subscriber commenced the testing of such Nasdaq service.
    (4)-(6) 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
    NASDAQ proposes to amend the fees assessed for use of the Testing 
Facility.\3\ The Testing Facility provides subscribers with a virtual 
NASDAQ System test environment that closely approximates the production 
environment, on which they may test their automated systems that 
integrate with NASDAQ. Subscribers may test upcoming NASDAQ releases 
and product enhancements, as well as test software prior to 
implementation. Currently, NASDAQ assesses a fee of $285 per hour for 
active connection testing using current NASDAQ access protocols during 
the normal operating hours, and $333 per hour for such testing after 
hours.
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    \3\ See http://www.nasdaqtrader.com/Trader.aspx?id=TestingFacility for a description of the Testing 
Facility.
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    NASDAQ does not currently assess a fee for idle test ports. 
Subscribers often have test ports assigned to them through which no 
testing is conducted for extended periods, yet NASDAQ must maintain and 
constantly monitor these idle testing ports for purposes of billing 
under the current rule. For all but CTCI and FIX connections to ACT and 
ACES, which are structurally different than other connections, such 
monitoring represents a cost to NASDAQ with no off-setting fee. 
Further, subscribers have no incentive to notify NASDAQ when they have 
completed testing and no longer require a test port. Accordingly, 
NASDAQ is proposing to eliminate the current hourly fee structure and 
assess a flat fee of $300 per test port, per month for all but CTCI and 
FIX connections to ACT and ACES. This fee will cover the cost of 
maintaining these test ports and provide an incentive to firms to 
cancel test ports when they have completed testing.
    NASDAQ notes that it will continue to allow new subscribers and 
existing subscribers to test new services and modifications initiated 
by NASDAQ, and to test new services not previously accessed for the 
first 30 days at no cost pursuant to Rule 7030(d)(3). This 30-day fee 
waiver includes testing for subscribers that are accessing NASDAQ 
through a service bureau for the first time. Subscribers must cancel 
the test port prior to the expiration of the 30-day free period in 
order to avoid future charges for test ports under the new rule. In 
addition, current subscribers will be able to cancel their idle ports 
at no cost at any point during the first month that the fee is 
effective. Further, NASDAQ is eliminating the word ``hourly'' from Rule 
7030(d)(3), since the fees for the Testing Facility include both hourly 
and monthly fees. Last, NASDAQ is eliminating from Rule 7030(d)(3) 
language concerning market data feed testing, since it is superfluous 
given that the rule already references fees that include such testing.
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with 
Section 6(b)(4) of the Act \4\ in that 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 NASDAQ 
operates or controls, and it does not unfairly discriminate between 
customers, issuers, brokers or dealers. The amended fee schedule 
applies to all

[[Page 69503]]

subscribers equally based on the number of test ports subscribed. This 
proposed charge would apply to both members that obtain test ports for 
direct access and non-member service bureaus that act as a conduit for 
orders entered by NASDAQ members that are their customers. The proposed 
fees will cover the costs associated with separately offering the 
service, responding to customer requests, configuring NASDAQ's systems, 
programming to user specifications, and administering the service, 
among other things, and may provide NASDAQ with a profit to the extent 
costs are covered. NASDAQ believes that the proposed fee structure 
strikes a balance between covering these costs, and providing 
incentives to subscribers to make efficient use of Test Facility ports.
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    \4\ 15 U.S.C. 78f(b)(4).
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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 that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended.

C. Self-Regulatory Organization's Statement on Comments Regarding 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 rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \5\ and subparagraph (f)(2) of Rule 19b-4 
thereunder.\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.
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    \5\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \6\ 17 CFR 240.19b-4(f)(2).
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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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2010-145 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-2010-145. This 
file number should be included on the subject line if e-mail 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 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 
a.m. and 3 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 publicly available. All 
submissions should refer to File Number SR-NASDAQ-2010-145 and should 
be submitted on or before December 3, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-28466 Filed 11-10-10; 8:45 am]
BILLING CODE 8011-01-P