Document ID: SEC-2010-0319-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2010-03-03T05:00Z

[Federal Register: March 3, 2010 (Volume 75, Number 41)]
[Notices]               
[Page 9632-9633]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03mr10-96]                         

[[Page 9632]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61580; File No. SR-NASDAQ-2010-016]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify Pricing for the NASDAQ Options Market (``NOM'')

February 24, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on January 27, 2010, The NASDAQ Stock Market LLC (``NASDAQ'') 
filed with the Securities and Exchange Commission (the ``Commission'') 
the proposed rule change as described in Items I, II, and III below, 
which Items have been prepared by NASDAQ. Pursuant to Section 
19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ 
NASDAQ has designated this proposal as establishing or changing a due, 
fee, or other charge, which renders the proposed rule change effective 
upon filing. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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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 Options Market (``NOM''). NASDAQ will make the proposed rule 
change effective on February 1, 2010. The text of the proposed rule 
change is available at http://nasdaqomx.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. NASDAQ 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 modifying NASDQ Rule 7050, the fee schedule for NOM, to 
establish pricing for two newly-listed products, the NASDAQ 100 Index 
Option (NDX) and the Mini NASDAQ 100 Index Option (MNX). Specifically, 
Nasdaq is establishing a fee of $0.50 per executed contract for 
Customers, Firms, and Non-NOM Market Makers to remove liquidity in NDX 
and MNX options and $0.40 per executed contract for NOM Market Makers 
to remove liquidity.\5\ Nasdaq is also proposing to offer a rebate of 
$0.10 per executed contract for Customers, Firms, and Non-NOM Market 
Makers and $0.20 per executed contract for NOM Market Makers.
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    \5\ NOM Market Makers must be registered as such pursuant to 
Chapter VII, Section 2 of the Nasdaq Options Rules, and must also 
remain in good standing pursuant to Chapter VII, Section 4. Non-NOM 
Market Makers are registered market makers on another options market 
that append the market maker designation to orders routed to NOM.
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    The proposed fee schedule distinguishes between firms that register 
to and actually make markets on NOM and firms that make markets on 
other options markets. This pricing convention, which is currently 
employed by the International Securities Exchange and other exchanges, 
recognizes the substantial value that registered market makers add to a 
given marketplace by guaranteeing to provide regular two-sided quotes 
and to maintain minimum liquidity.\6\ Nasdaq seeks to encourage 
continued market making on NOM and to attract additional market making 
by establishing this new fee schedule. To receive NOM Market Maker 
pricing, the firm must be registered as a NOM Market Maker in the 
specified security.
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    \6\ See ISE Fee Schedule. http://www.ise.com/assets//documents//
OptionsExchange//legal/fee/fee_schedule.pdf.
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    Nasdaq believes that the proposed fees are competitive, fair and 
reasonable, and non-discriminatory in that they apply equally to all 
similarly situated members and customers. As with all fees, Nasdaq may 
adjust these proposed fees in response to competitive conditions by 
filing a new proposed rule change. If the proposed fee schedule is 
successful in establishing vibrant markets in NDX and MNX options on 
NOM, Nasdaq may expand this pricing model to other options in the 
future.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\7\ in general, and with Section 
6(b)(4) of the Act,\8\ 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. Consistent with past practice, the 
proposed change identifies a class of person subject to transaction 
execution fees based on the role of that class in bringing order flow 
to NASDAQ.
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    \7\ 15 U.S.C. 78f.
    \8\ 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 rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \9\ and subparagraph (f)(2) of Rule 19b-4 
thereunder.\10\ 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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    \9\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \10\ 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

[[Page 9633]]

Number SR-NASDAQ-2010-016 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-2010-016. 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 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-2010-016 and should be submitted on or before March 24, 2010.

    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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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-4367 Filed 3-2-10; 8:45 am]
BILLING CODE 8011-01-P