Document ID: SEC-2008-0675-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2008-05-08T04:00Z

[Federal Register: May 8, 2008 (Volume 73, Number 90)]
[Notices]               
[Page 26177-26179]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08my08-138]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57753; File No. SR-NASDAQ-2008-036]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify Fees for Members Using the Nasdaq Market Center

 May 1, 2008.
    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 April 24, 2008, The NASDAQ Stock Market LLC (``Nasdaq'') filed with 
the Securities and Exchange Commission (``Commission'')

[[Page 26178]]

the proposed rule change as described in Items I, II, and III below, 
which Items have been prepared substantially by Nasdaq. Pursuant to 
Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) \4\ 
thereunder, Nasdaq has designated this proposal as establishing or 
changing a member due, fee, or other charge, which renders the proposed 
rule change effective immediately upon filing.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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    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 modify pricing for Nasdaq members using the 
Nasdaq Market Center. Nasdaq will implement this proposed rule change 
on May 1, 2008. The text of the proposed rule change is available at 
http://nasdaq.complinet.com, Nasdaq, and 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 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 is adopting a more unified pricing schedule for fees charged 
for order execution and routing of orders that check the Nasdaq Market 
Center book prior to routing.\5\ The new fees apply to (i) Execution 
and routing of orders for securities listed on Nasdaq (``Nasdaq 
Trades''); (ii) execution of securities listed on the New York Stock 
Exchange (``NYSE''), routing of NYSE-listed securities to venues other 
than the NYSE, and routing of NYSE-listed exchange-traded funds to the 
NYSE (collectively, ``Covered NYSE Trades''); and (iii) execution and 
routing of orders for securities listed on exchanges other than Nasdaq 
and NYSE (``Regional Trades''). The changes are designed to promote 
Nasdaq as a liquid and transparent venue for executing all exchange-
listed securities by, in general, increasing the credit provided to 
members providing displayed liquidity through Nasdaq and decreasing the 
credit provided to members providing non-displayed liquidity. Nasdaq is 
also increasing the fees to access and/or route liquidity using orders 
that check the Nasdaq book prior to routing. Fees for routing orders 
that do not check the Nasdaq book prior to routing will remain 
unchanged, as will the fees for routing orders other than exchange-
traded funds to the NYSE. Similarly, fees for securities priced at less 
than $1, fees for routing odd-lots, and fees for routing orders that 
are charged a fee by exchange specialists are not changing.
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    \5\ The proposed rule change also corrects typographical errors 
in Rule 7018(a)(2).
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    Under the revised pricing schedule, a member with an average daily 
volume through the Nasdaq Market Center in all securities during the 
month of (i) more than 35 million shares of liquidity provided, and 
(ii) more than 55 million shares of liquidity accessed and/or routed 
will pay $0.0029 per share executed,\6\ and other members will pay 
$0.003. However, a member that would otherwise pay $0.003 to execute 
trades in the Nasdaq Market Center will instead pay $0.00295 if it 
accesses a daily average of more than 55 million shares of liquidity 
through the Nasdaq Market Center in the month.\7\
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    \6\ Currently, members with an average daily volume of (i) more 
than 20 million shares of liquidity provided and (ii) more than 35 
million shares of liquidity accessed and/or routed, pay $0.0028 per 
share executed for Nasdaq Trades, $0.0029 per share executed for 
Covered NYSE Trades, $0.0028 per share executed for Regional Trades 
executed at Nasdaq, and $0.0029 for routing Regional Trades. Members 
with an average daily volume of more than 35 million shares of 
liquidity provided and (ii) more than 55 million shares of liquidity 
accessed and/or routed; or with an average daily volume of (i) more 
than 25 million shares of liquidity provided, and (ii) more than 65 
million shares of liquidity accessed and/or routed currently pay 
$0.0026 per share executed for Nasdaq Trades, $0.0028 per share 
executed for Covered NYSE Trades, $0.0026 for Regional Trades 
executed at Nasdaq, and $0.0028 per share executed for routing 
Regional Trades. Other members currently pay $0.003 per share 
executed.
    \7\ Currently, a member that accesses an average of 55 million 
shares of liquidity or more through the Nasdaq Market Center in a 
month pays $0.00265 for Nasdaq Trades and Regional Trades executed 
in the Nasdaq Market Center and $0.00285 for NYSE Covered Trades 
executed in the Nasdaq Market Center unless the member qualifies for 
a better rate.
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    Members that provide an average daily volume through the Nasdaq 
Market Center in all securities during the month of more than 35 
million shares of liquidity provided will receive a credit of $0.0028 
per share for executions against displayed liquidity and $0.0015 per 
share for executions against non-displayed liquidity.\8\ Members with 
an average daily volume through the Nasdaq Market Center in all 
securities during the month of more than 20 million shares of liquidity 
provided (but that do not qualify for the higher credit described in 
the preceding sentence) will receive a credit of $0.0025 per share for 
executions against displayed liquidity and $0.001 per share for 
executions against non-displayed liquidity.\9\ Other members will 
receive a credit of $0.002 per share for executions against displayed 
liquidity and $0.001 per share for executions against non-displayed 
liquidity.\10\ Nasdaq is also eliminating a program under which certain 
``low-volume securities'' listed on exchanges other than Nasdaq or NYSE 
qualified for an enhanced liquidity provider credit of $0.004 for 
displayed liquidity and $0.0039 for non-displayed liquidity. When 
Nasdaq introduced this program, it also amended Rule 7013 to eliminate 
market data revenue sharing for these low-volume securities. 
Accordingly, Nasdaq is against amending this rule to reinstate revenue 
sharing for transactions in these securities executed through the 
Nasdaq Market Center, at the same 50% level previously in effect.
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    \8\ Currently, members at these volume levels receive $0.0025 
for displayed Nasdaq Trades and Regional Trades, $0.024 for non-
displayed Nasdaq Trades and Regional Trades, $0.0027 for displayed 
Covered NYSE Trades, and $0.0026 for non-displayed Covered NYSE 
Trades.
    \9\ Currently, members at these volume levels receive $0.0023 
for displayed Covered NYSE Trades, $0.0022 for non-displayed Covered 
NYSE Trades, $0.0022 for displayed Nasdaq Trades and Regional 
Trades, and $0.0021 for non-displayed Nasdaq Trades and Regional 
Trades.
    \10\ Currently, members at these volume levels receive $0.002 
for displayed trades in all securities and $0.0019 for non-displayed 
trades in all securities.
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2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\11\ in general, and with 
Section 6(b)(4) of the Act,\12\ in particular, 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 Nasdaq operates or controls. The impact of the changes 
upon the net fees paid by a particular market participant will depend 
upon a number of variables, including its monthly volume, the order 
types it uses, and the prices of its quotes and orders (i.e., its 
propensity to add or remove liquidity). Nasdaq notes that it

[[Page 26179]]

operates in a highly competitive market in which market participants 
can readily direct order flow to competing venues if they deem fee 
levels at a particular venue to be excessive. Although the proposed 
rule change increases order execution and routing fees and decreases 
liquidity provider credits for non-displayed liquidity, it also 
increases credits for displayed liquidity. Nasdaq believes that its 
fees remain competitive with those charged by other venues and 
therefore continue to be reasonable and equitably allocated to those 
members that opt to direct orders to Nasdaq rather than competing 
venues.
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    \11\ 15 U.S.C. 78f.
    \12\ 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 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 proposed rule change has become effective upon filing 
with the Commission pursuant to Section 19(b)(3)(A)(ii) of the Act \13\ 
and Rule 19b-4(f)(2) thereunder,\14\ in that the proposed rule change 
establishes or changes a member due, fee, or other charge imposed by 
the self-regulatory organization. At any time within 60 days of the 
filing of the proposed rule change, the Commission may summarily 
abrogate 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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    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \14\ 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-2008-036 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2008-036. 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 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 inspection 
and copying in the Commission's Public Reference Room 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 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-2008-036 and should be submitted on or before May 
29, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-10211 Filed 5-7-08; 8:45 am]

BILLING CODE 8010-01-P