Document ID: SEC-2022-0239-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market, LLC
Posted Date: 2022-02-17T05:00Z

[Federal Register Volume 87, Number 33 (Thursday, February 17, 2022)]
[Notices]
[Pages 9096-9099]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-03391]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94226; File No. SR-NASDAQ-2022-012]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Equity 7, Section 115 of the Fee Schedule

February 11, 2022.
    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 31, 2022, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') 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 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

    The Exchange proposes to amend the Exchange's pricing schedule at 
Equity 7, Section 115, as described further below.
    The text of the proposed rule change is detailed below: proposed 
new language is italicized and proposed deletions are in brackets.

* * * * *

The Nasdaq Stock Market Rules

* * * * *

Equity Rules

* * * * *

Equity 7 Pricing Schedule

* * * * *

Section 115. Ports and Services[dagger]

    The charges under this section are assessed by Nasdaq for 
connectivity to services and the following systems operated by 
Nasdaq or FINRA: The Nasdaq Market Center, FINRA Trade Reporting and 
Compliance Engine (TRACE), the FINRA/Nasdaq Trade Reporting 
Facility, and the FINRA OTC Reporting Facility (ORF). The following 
fees are not applicable to The Nasdaq Options Market LLC. For 
related options fees for Ports and other Services refer to Options 
7, Section 3 of the Options Rules.
    (a)-(d) No change.
    (e) Specialized Services Related to FINRA/Nasdaq Trade Reporting 
Facility.

[[Page 9097]]

 
 
 
WebLink ACT or Nasdaq.............  $[5]625[.00]/month
Workstation Post Trade............  A subscription includes: The Trade
                                     Reporting File Upload service,
                                     which allows members to upload
                                     multiple trade reports in batches
                                     to ACT; and the ACT Reject Scan
                                     service, which provides a list of
                                     all of a member's rejected ACT
                                     trade entries and a copy of each
                                     rejected trade report form
                                     submitted to ACT.
                                    [$225 per month for the ACT Trade
                                     History service which provides
                                     searchable access to a member's
                                     trades that are older than six
                                     months dating back to 2009.]
ACT Workstation...................  $[5]625/logon/month
                                    [$225 per month for the ACT Trade
                                     History service which provides
                                     searchable access to a member's
                                     trades that are older than six
                                     months dating back to 2009.]
Nasdaq WorkX......................  $[5]625/logon/month
                                    [$225 per month for the ACT Trade
                                     History service which provides
                                     searchable access to a member's
                                     trades that are older than one year
                                     dating back five years.] For
                                     customers using both Act
                                     Workstation and Nasdaq WorkX, fees
                                     for Nasdaq WorkX will be waived for
                                     the first month of service.
 

    (f)-(j) No change.
    [dagger] Fees, other than the specialized service fees in 
Section 115(e), are assessed in full month increments under this 
section, and thus are not prorated.
* * * * *
    (b) Not applicable.
    (c) Not applicable.

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 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. 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 proposed rule change is to amend the Exchange's 
schedule of fees, at Equity 7, Section 115(e). In April 2021, the 
Exchange enhanced its connectivity, surveillance and risk management 
services by launching three re-platformed products including Nasdaq 
WorkX\TM\ (``WorkX'').\3\ These changes were filed by the Exchange on 
April 20, 2021 and published in the Federal Register on May 7, 2021.\4\ 
The Exchange noted in the filing that as it rolled out the enhanced 
products, the fees for the re-platformed products would be the same as 
the fees for the corresponding non-re-platformed products. After the 
first month of service on WorkX, a member firm is expected to fully 
migrate to the new product and is charged for any fees incurred for 
using the new products thereafter. To date, the Exchange continues to 
assist its members in migrating from Workstation to WorkX.
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    \3\ WorkX is a re-platformed version of Workstation that 
simplifies compliance with regulatory responsibilities and enhances 
the user experience with improved workflow, system performance, and 
data visualization. WorkX also upgrades trade reporting and 
monitoring with a modern user interface using cloud-based 
technology.
    \4\ See Securities Exchange Act Release No. 91744 (May 3, 2021), 
86 FR 24685 (May 7, 2021) (NASDAQ-2021-025).
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    The Exchange proposes to increase its existing fees for ACT 
Workstation (``Workstation''),\5\ WebLink ACT or Nasdaq Workstation 
Post Trade (``WebLink''), \6\ and WorkX from $525 to $625. These fees 
solely apply to the FINRA/Nasdaq Trade Reporting Facility (TRF) related 
services.
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    \5\ Workstation is a web-based application that electronically 
facilitates trade reporting and clearing functions for trades 
reported to the FINRA/Nasdaq TRF. Workstation services include trade 
entry, trade scan, and uploads for bulk trade entry to support 
FINRA/Nasdaq TRF participant trade reporting in accordance with 
Financial Industry Regulatory Authority (``FINRA'') rules.
    \6\ Workstation and WebLink are identical applications that 
perform the same functions. For historical reasons, they each have 
separate entries on the Exchange's fee schedule. WebLink, the same 
as Workstation, is a web-based application that electronically 
facilitates trade reporting and clearing functions for trades 
reported to the FINRA/Nasdaq TRF.
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    The Exchange also proposes to eliminate the ACT Trade History 
service fee of $225 for each of these existing products. The ACT Trade 
History service provides searchable access to a member's trades.\7\ The 
Exchange believes it is important for users to freely perform unlimited 
scans and queries of their trade history to effectively perform their 
regulatory responsibilities without being hampered by the separate ACT 
Trade History charge.\8\
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    \7\ WebLink and Workstation provide searchable access to a 
member's trades that are older than six months dating back to 2009. 
WorkX provides searchable access to a member's trades that are older 
than one year dating back five years.
    \8\ In its capacity as a Business Member of the FINRA/Nasdaq 
TRF, Nasdaq also plans to separately eliminate the $0.50 per query 
fee that is charged for querying reported transactions in the FINRA/
Nasdaq TRF using Workstation, WebLink and WorkX. The change was 
proposed in FINRA-2022-002, which was filed on January 31, 2022.
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    Additionally, the Exchange proposes to prorate the cost of the 
first and last month of a user's subscription to the WebLink, 
Workstation and WorkX products.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\9\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\10\ 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, and is 
not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange's proposal is reasonable in several respects. As a 
threshold matter, the FINRA/Nasdaq TRF and its related front-end 
products are subjected to significant competitive forces in the market 
for trade reporting and regulatory compliance services that constrain 
the Exchange's pricing determinations for Workstation, WebLinks and 
WorkX. The Commission and the courts have repeatedly expressed their 
preference for competition over regulatory intervention in determining 
prices, products, and services in the securities markets.
    The competitive nature of this market is evidenced by the FINRA/
NYSE TRF, to which firms may report their trade instead of the FINRA/
Nasdaq TRF, and which offers a similar front-end trade reporting and 
regulatory compliance service to trade report, clear and monitor 
compliance for activity on its facility. Firms may choose to trade 
report with the FINRA/NYSE TRF based on the features and functionality 
of the TRF or based on the features and functionality of the regulatory 
reporting and compliance front-end services

[[Page 9098]]

offered for the FINRA/NYSE TRF. Within this competitive environment, 
customers can freely select the FINRA/NYSE trade reporting facility and 
its trade reporting and compliance front-end services in response to 
changes in the Exchange's pricing schedule.
The Proposal Is Reasonable
    The Exchange believes that the proposal to raise fees for 
Workstation, WebLinks and WorkX is reasonable because of the 
competitive forces described above. Moreover, the Exchange has not 
adjusted its fees for these products since 2016.
    Additionally, the Exchange believes that it is reasonable to remove 
the ACT Trade History data charge from WebLink, Workstation and WorkX 
because removal of this fee streamlines the cost to one base fee with 
no add-on search charges and will allow users to freely perform 
unlimited query searches of their trade history. As discussed above, 
these searches assist users in performing their regulatory 
responsibilities. Additionally, the proposed fee increase of $100 for 
using Weblink, Workstation or WorkX is less than half of the current 
ACT Trade History fee. Therefore, users who utilize the trade history 
feature may incur decreased fees. For example, a user who is subscribed 
to one log-on for WorkX and utilizes the ACT Trade History search 
feature currently pays $750/month. Under the proposed fee changes, the 
subscriber will pay $625/month. Although some users will incur a 
decrease in fees as a result of the proposed changes, there are some 
users whose fees may increase. For example, a user who is subscribed to 
one log-on for WorkX and does not utilize the ACT Trade History search 
feature currently pays $525/month. Under the proposed fee changes, the 
subscriber will pay $625/month with no additional charge for the use of 
the ACT Trade History. Because users who choose to utilize the optional 
ACT Trade History function have historically incurred a higher fee than 
those who have not utilized the function, the impact of the proposed 
change will be different for those users. The Exchange believes that 
the difference in impact resulting from the proposed changes is 
reasonable and not unfairly discriminatory because all users will be 
able to use ACT Trade History without a separate fee and those who have 
not used ACT Trade History in the past may decide to start using the 
service. Moreover, the Exchange notes that users who are dissatisfied 
with the proposal (e.g., if they experience an overall increase) are 
free to utilize the FINRA/NYSE TRF and its related front-end service.
    Additionally, the Exchange believes that it is reasonable to 
prorate the fees for the first and last month of a user's subscription 
to Workstation, Weblink and WorkX. For example, the Exchange believes 
that it is reasonable to charge a user who unsubscribes to any of the 
three products on December 2 or subscribes on December 30 only for the 
days that they are actually subscribed to the products.
The Proposal Is an Equitable Allocation of Fees
    Nasdaq believes that the proposed rule change will allocate fees 
fairly among the users of WebLink, Workstation and WorkX.
    The Exchange believes that it protects investors and is an 
equitable allocation to eliminate its existing $225 ACT Trade History 
fee. As discussed above, removal of the fee eliminates any impediment 
for users to freely utilize the search functions to monitor and satisfy 
their regulatory responsibilities. Moreover, the Exchange believes that 
prorating the fees for the first and final month of a user's 
subscription will ensure that the fees are equitable to a user's 
utilization of the products.
    Lastly, although all users of Workstation, WebLink and WorkX 
products will incur an increased monthly fee for use of the products, 
some users who utilize the optional ACT Trade History function will 
receive a decrease in their overall fees. The Exchange believes it is 
equitable for some users to incur an increased fee and for other users 
to receive a decrease because users who choose to utilize the ACT Trade 
History function have historically incurred a higher fee than those who 
have not utilized the function. Therefore, the impact of the proposed 
change will affect users differently than users who have not 
historically utilized the function. The Exchange believes that the 
difference in impact resulting from the proposed changes is equitable 
because all users will be able to use ACT Trade History without a 
separate fee and those who have not used ACT Trade History in the past 
may decide to start using the service. Moreover, the Exchange notes 
that users who are dissatisfied with the proposal (e.g., if they 
experience an overall increase) are free to utilize the FINRA/NYSE TRF 
and its related front-end service.
The Proposal Is Not Unfairly Discriminatory
    The Exchange believes that the proposal is not unfairly 
discriminatory. All users of WebLink, Workstation and WorkX will be 
required to pay the proposed increased subscription fee and the 
proposed fees will apply to all users in the same manner. As discussed 
above, although some users will incur a decrease in fees as a result of 
the proposed changes, there are some users whose fees may increase. 
Users who have historically chosen to not incur the additional cost of 
the ACT Trade History will pay a modestly higher proportionate amount. 
The Exchange does not believe that this disparity among users is 
unfairly discriminatory because users who choose to utilize the 
optional ACT Trade History function have historically incurred a higher 
fee than those who have not utilized the function. Therefore, the 
impact of the proposed change will be different for those users. The 
Exchange believes that the difference in impact resulting from the 
proposed changes is not unfairly discriminatory because all users will 
be able to use ACT Trade History without a separate fee and those who 
have not used ACT Trade History in the past may decide to start using 
the service. Additionally, all users, to the extent that they already 
subscribe to ACT Trade History will benefit from the proposed removal 
of the ACT Trade History fee and all users will benefit from the 
proration of the first and last month of their subscription.
    Moreover, the Exchange notes that users who are dissatisfied with 
the proposal (e.g., if they experience an overall increase) are free to 
utilize the FINRA/NYSE TRF and its related front-end service.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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.
Intramarket Competition
    The Exchange does not believe that its proposals will place any 
category of Exchange participant at a competitive disadvantage. All 
users of WebLink, Workstation and WorkX will be required to pay the 
proposed increase fee for a subscription to any of the three products 
and will receive a proration for the first and last month of their 
subscription. To the extent that members were not utilizing any of the 
three products, the proposed fee change will not place them at a 
competitive disadvantage. The Exchange notes that its members are not 
required to subscribe to the products if they believe

[[Page 9099]]

that the cost of the subscriptions is not attractive.
    The proposed elimination of the ACT Trade History fee for WebLink, 
Workstation and WorkX will have minimal competitive effect insofar as 
some users that utilize the ACT Trade History service may receive a 
decrease in their overall subscription to the products. As discussed 
above, although some users will incur a decrease in fees and others 
will incur a fee increase because of the proposed changes, the Exchange 
does not believe that this difference will result in a competitive 
disadvantage to any users because the proposed rule change will allow 
all users of WebLink, Workstation and WorkX to freely use the tool at 
no additional cost.
    Firms also have the option of reporting their trades on the FINRA/
NYSE TRF and utilizing its trade reporting and regulatory compliance 
service products if they are dissatisfied with the Exchange's fee 
proposal.
Intermarket Competition
    The Exchange believes that its proposed modifications to its fee 
schedule will not impose any burden on competition because the 
increased fees, proration and removal of ACT Trade History charges 
simplifies the subscription rates for these products and ensures that 
the Exchange is able to continue to provide the best products that 
benefit member firms. The Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor the 
FINRA/NYSE TRF if they are dissatisfied with the fee change or deem the 
FINRA/NYSE TRF and its related front-end products to be more favorable. 
The proposed fee changes to WebLink, Workstation and WorkX are 
reflective of this competition.

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

    No written comments were either solicited or received.

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

    Pursuant to Section 19(b)(3)(A)(ii) of the Act,\11\ the Exchange 
has designated this proposal as establishing or changing a due, fee, or 
other charge imposed by the self-regulatory organization on any person, 
whether or not the person is a member of the self-regulatory 
organization, which renders the proposed rule change effective upon 
filing.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule 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 [email protected]. Please include 
File Number SR-NASDAQ-2022-012 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-NASDAQ-2022-012. 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 website (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 website 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 the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NASDAQ-2022-012 and should be submitted 
on or before March 10, 2022.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-03391 Filed 2-16-22; 8:45 am]
BILLING CODE 8011-01-P