Document ID: SEC-2010-1687-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2010-11-03T04:00Z

[Federal Register Volume 75, Number 212 (Wednesday, November 3, 2010)]
[Notices]
[Pages 67791-67794]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-27688]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63197; File No. SR-NASDAQ-2010-136]

Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NASDAQ Stock Market, LLC 
Relating to Access Service Fees

October 27, 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 20, 2010, The NASDAQ Stock Market LLC (``NASDAQ'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``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 modify Exchange Rule 7015, related to fees 
governing pricing for NASDAQ members using The NASDAQ Stock Market LLC 
and the NASDAQ Options Market (``NOM''), NASDAQ's facility for 
executing and routing standardized equity and index options, to apply 
only to The NASDAQ Stock Market LLC. The Exchange also proposes to 
create a new Rule 7053 which would include Access Services applicable 
only to NOM.
    The text of the proposed rule change is set forth below. Proposed 
new text is in italics and deleted text is in [brackets].
* * * * *

[[Page 67792]]

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 Rule 7053.
    (a) Nasdaq Information Exchange (QIX)

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Port pair (plus optional proprietary   $1,200 per month.
 quote information port).
ECN direct connection port pair......  $1,200 per month.
Unsolicited message port.............  $1,000 per month.
------------------------------------------------------------------------

    (b) Financial Information Exchange (FIX)

------------------------------------------------------------------------
            [Options] Ports                           Price
------------------------------------------------------------------------
FIX Trading Port.......................  $500/port/month.
FIX Port for Services Other than         $500/port/month.
 Trading.
------------------------------------------------------------------------

    (c) Computer to Computer Interface (CTCI)

Stations

------------------------------------------------------------------------
            Fee component                             Fee
------------------------------------------------------------------------
1st Station..........................  $200/Station/month.
Each Additional Station..............  $600/Station/month.
------------------------------------------------------------------------

    The bandwidth-based fees in the table below apply to CTCI 
subscribers that have not transitioned off of Nasdaq-supported 
circuits.

Bandwidth

----------------------------------------------------------------------------------------------------------------
                Fee component                                                 Fee
----------------------------------------------------------------------------------------------------------------
Single 56kb line with single hub and router   $900/month.
 (for remote disaster recovery sites only).
Option 1:
    Dual 56kb lines (one for redundancy) and  $1,000/month.
     single hub and router.
Option 2:
    Dual 56kb lines (one for redundancy),     $1,200/month.
     dual hubs (one for redundancy), and
     dual router (one for redundancy).
Option 3:
    Dual T1 lines (one for redundancy), dual  $2,500/month.
     hubs (one for redundancy), and dual
     routers (one for redundancy). Includes
     base bandwidth of 128kb.
Bandwidth Enhancement Fee (for T1
 subscribers only):
    Per 64kb increase above 128kb T1 base...  $200/month.
    Option 1, 2, or 3 with Message Queue      Fee for Option 1, 2, or 3 (including any Bandwidth Enhancement
     software enhancement.                     Fee) plus 20%.
    Installation Fee........................  $2,000 per site for dual hubs and routers.
                                              $1,000 per site for single hub and router.
    Relocation Fee (for the movement of TCF/  $1,700 per relocation.
     IP-capable lines within a single
     location).
----------------------------------------------------------------------------------------------------------------

    (d) New Nasdaq Workstation

----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Nasdaq Workstation Trader...................  $475 per user per month (including data entitlement package).
Nasdaq Workstation Post Trade...............  See Rule 7015(e).
----------------------------------------------------------------------------------------------------------------

    (e) Specialized Services Related to FINRA/NASDAQ Trade Reporting 
Facility

----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
CTCI fee....................................  $575/month.
WebLink ACT or Nasdaq Workstation Post Trade  $375.00/month (full functionality) or $200.00/month (up to an
                                               average of twenty transactions per day each month) (For the
                                               purposes of this service only, a transaction is defined as an
                                               original trade entry, either on trade date or as-of transactions
                                               per month.)
ACT Workstation.............................  $525/logon/month.
----------------------------------------------------------------------------------------------------------------

    (f) TradeInfo
    Members not subscribing to the Nasdaq Workstation using TradeInfo 
will be charged a fee of $95 per user per month.
    (g) Other Port Fees
    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 $,000 per month.
     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.
    (h) VTE Terminal Fees
     Each ID is subject to a minimum commission fee of $100 per 
month unless it executes a minimum of 100,000 shares.
     Each ID receiving market data is subject to pass-through 
fees for use of these services. Pricing for these services is 
determined by the exchanges and/or market center.
     Each ID that is given web access is subject to a $100 
monthly fee.
* * * * *

[[Page 67793]]

7053. NASDAQ Options Market--Access Services

    The following charges are assessed by Nasdaq for connectivity to 
the NASDAQ Options Market.
    (a) Financial Information Exchange (FIX)

------------------------------------------------------------------------
                 Ports                                Price
------------------------------------------------------------------------
FIX Trading Port.......................  $500/port/month.
FIX Port for Services Other than         $500/port/month.
 Trading.
------------------------------------------------------------------------

    (b) TradeInfo
     Members not subscribing to the Nasdaq Workstation using 
TradeInfo will be charged a fee of $95 per user per month.
    (c) Other Port Fees
    The following port fees shall apply in connection with the use of 
other trading telecommunication protocols:
     $500 per month for each port pair.
* * * * *
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nasdaq.cchwallstreet.com, at the principal 
office of the Exchange, 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, 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
    NASDAQ is proposing to separate its equity and options fees which 
are assessed for connectivity to systems operated by NASDAQ.
    Currently Rule 7015, titled Access Services, contains fees 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. Rule 7015 applies to both The NASDAQ Stock 
Market LLC members, conducting an equities business, and NOM members, 
conducting an options business. Access Services fees relate to ports 
used to: Enter orders into the NASDAQ trading systems; receive market 
data; enter quotes; and enter trade reports into the FINRA/NASDAQ Trade 
Reporting Facility.
    The Exchange is proposing to add the following language to Rule 
7015 so that it applies solely to The NASDAQ Stock Market LLC members: 
``The following fees are not applicable to the NASDAQ Options Market 
LLC. For related options fees for Access Services refer to Rule 7053.'' 
The Exchange is proposing to list those Access Service Fees which would 
apply to NOM members in a separate Rule.
    The Exchange proposes to create a new Rule 7053, titled ``NASDAQ 
Options Market--Access Services'' which would apply to NOM members 
conducting an options business. Specifically, this proposed new Rule 
would include pricing for the Financial Information Exchange or 
``FIX'', TradeInfo and pricing for Other Port Fees. The pricing in Rule 
7053 would be the same pricing that is currently assessed to NOM 
members today in Rule 7015 for FIX pricing, \3\ TradeInfo \4\ and 
applicable portion of Other Fees.\5\
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    \3\ For FIX pricing, the Exchange would assess: A Fix Trading 
Port fee of $500 per month per port; and a FIX Port for Services 
Other than Trading fee of $500 per month, per port.
    \4\ Currently, NOM members not subscribing to the Nasdaq 
Workstation using TradeInfo are charged a fee of $95 per user per 
month. TradeInfo allows users to scan for their Nasdaq-listed orders 
submitted in Nasdaq. Users can then perform actions on their orders. 
Users can scan for all orders in a particular security or all orders 
of a particular type, regardless of their status (open, canceled, 
executed, etc.). For example, after scanning for open orders the 
user is then able to select an open order and is allowed to make 
corrections to the order or cancel the order. TradeInfo also allows 
the users to scan other orders, such as executed, cancelled, broken, 
rejected and suspended orders.
    \5\ Currently, NOM members are assessed the $500 per month fee 
for each port pair. The remaining ``Other Port Fees'' are not 
applicable to NOM members today; those fees apply to members of The 
NASDAQ Stock Market LLC. To further clarify, only certain features 
are available on the NOM system. The Other Port Fees that exist in 
Rule 7015 that were not duplicated in new proposed Rule 7053 are not 
available on the NOM system but rather are available to members 
transacting equities only.
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    The Exchange also proposes to make a technical amendment to Rule 
7015 in section (b), titled Financial Information Exchange (FIX), to 
change the word ``Options'' to the word ``Ports'' to clarify 
information contained in that section does not relate to options 
trading but rather that term is used to define the fee categories in 
that section.
    The remaining sections of Rule 7015 which are not proposed in new 
Rule 7053 do not apply to NOM members. Fees which are currently 
contained in Rule 7015 that were not duplicated in new proposed Rule 
7053 are not available on the NOM system. Those fees are available to 
members transacting equities only.\6\ Today, the Exchange only assesses 
the applicable fees contained in Rule 7015 that apply to The NASDAQ 
Stock Market LLC members and/or NOM members, respectively. In other 
words, members transacting options only are assessed fees available on 
the NOM system. In creating this new Rule 7053, the Exchange is not 
changing which members are assessed certain fees, but rather the 
Exchange is proposing to separate the equities and options fees into 
two separate Rules.
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    \6\ The Commission notes that this is illustrated in note 5. See 
supra note 5 (clarifying that only certain features are available on 
the NOM system).
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    The Exchange believes that creating two separate Rules for Access 
Service pricing, one related to The NASDAQ Stock Market LLC and one 
related to NOM, would provide more clarity for members as well as ease 
of reference.
2. Statutory Basis
    NASDAQ believes that the proposed rule changes are 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.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes the proposed amendments to Rule 7015 and the 
addition of proposed new Rule 7053 provides more clarity to The NASDAQ 
Stock Market LLC and NOM members as to the Access Service Fees which 
are applicable to each market. The Exchange believes that creating 
different Rules applicable to the equities and options markets for 
Access Service Fees provides ease of reference for members of each 
market. Also, the technical amendment should serve to avoid confusion.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.

[[Page 67794]]

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\9\ 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. If the Commission takes such action, the Commission shall 
institute proceedings to determine whether the proposed rule should be 
approved or disapproved.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-2010-136 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2010-136. 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 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 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-2010-136 and should be submitted on or before November 24, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-27688 Filed 11-2-10; 8:45 am]
BILLING CODE 8011-01-P