Document ID: SEC-2011-1958-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2011-12-16T05:00Z

[Federal Register Volume 76, Number 242 (Friday, December 16, 2011)]
[Notices]
[Pages 78325-78327]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32238]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65931; File No. SR-NASDAQ-2011-168]

Self-Regulatory Organizations; NASDAQ Stock Market LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Relating 
to Option Fee Disputes

December 9, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on November 30, 2011. 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 
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 Substance 
of the Proposed Rule Change

    The NASDAQ Stock Market LLC proposes to amend Rule 7056 entitled 
``NASDAQ Options Fee Disputes'' to specify that the Options Regulatory 
Fee is subject to Rule 7056.
    The text of the proposed rule change is set forth below. Proposed 
new text is italicized and deleted text is in brackets.
* * * * *

7056. NASDAQ Options Fee Disputes

    (a) All fee disputes concerning fees which are billed by the 
Exchange must be submitted to the Exchange in writing and must be 
accompanied by supporting documentation.
    (b) All fee disputes must be submitted no later than sixty (60) 
days after receipt of a billing invoice.
    (c) This Rule applies to the following NASDAQ Options Market fees:
    (1) Rule 7050 ``NASDAQ Options Market--Fees''; [and]

[[Page 78326]]

    (2) Rule 7053 ``NASDAQ Options Market--Access Services,'' with the 
exception of the TradeInfo Fee[.]; and
    (3) Rule 7059 ``NASDAQ Options Regulatory Fee.''
* * * * *
    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. 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 proposes to amend Rule 7056 entitled ``NASDAQ Options Fee 
Disputes'' to list Rule 7059 entitled ``NASDAQ Options Regulatory Fee'' 
as a fee subject the fee dispute Rule.\3\ Currently, Rule 7056 requires 
NOM Participants to submit all fee disputes to the Exchange in writing 
\4\ and accompanied by supporting documentation within sixty days of 
receipt of an invoice.\5\ Exchange Rule 7056 applies to the fees in 
Rule 7050 entitled ``NASDAQ Options Market'' and Rule 7053 entitled 
``NASDAQ Options Market--Access Services'' with the exception of the 
TradeInfo Fee. The Exchange is now proposing to also apply Rule 7056 to 
the Options Regulatory Fee.\6\
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    \3\ The Exchange recently filed a proposed rule change to adopt 
an Options Regulatory Fee operative on January 3, 2012. See SR-
NASDAQ-2011-163.
    \4\ The Exchange invoice specifies the Exchange contact persons 
with whom to dispute the invoice.
    \5\ Rule 7056 will be operative on January 3, 2012 and would 
first apply to invoices related to transactional billing in January 
2012 and would apply thereafter. See Securities Exchange Act Release 
No. 65718 (November 9, 2011), 76 FR 71088 (November 16, 2011) (SR-
NASDAQ-2011-147).
    \6\ NASDAQ OMX PHLX LLC (``Phlx'') applies the same fee dispute 
rule to its Options Regulatory Fee. See Phlx's Fee Schedule.
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    The Exchange believes that this practice will conserve Exchange 
resources which are expended when untimely billing disputes require 
staff to research applicable fees and order information beyond two 
months after the transaction occurred. The Exchange believes that NOM 
Participants should be aware of any billing errors within two months of 
receiving an invoice. The Exchange provides NOM Participants with the 
ability to sign-up to receive certain daily reports.\7\ These reports 
allow NOM Participants to view trade data and fees prior to receiving a 
billing invoice. In addition, NOM Participants have access to a 
password protected Web site, which provides NOM Participants an 
electronic copy of current and historical invoices, as well as the 
supporting details for assessed charges.\8\ NOM Participants have the 
ability to retrieve trade information from this Web site on a T +1 
basis.
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    \7\ These reports include, but are not limited to, daily traded 
against report and daily cancel fee reports.
    \8\ The Web site is MyNASDAQOMX.com. See Options Trader Alert 
2011-60.
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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 Section 
6(b)(5) of the Act \10\ in particular, in that it is designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general to protect investors and the public 
interest, by providing a uniform practice for disputing fees.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that it is reasonable, equitable and not 
unfairly discriminatory to impose a requirement on the ORF, similar to 
other fees, concerning fee disputes. The Exchange believes the 
requirement that all fee disputes, for certain specified fees, must be 
submitted to the Exchange within sixty days from receipt of the invoice 
is reasonable because the Exchange provides ample tools to properly and 
timely monitor and account for various charges incurred in a given 
month.\11\ The proposal is equitable and not unfairly discriminatory 
because it equally applies to all NOM Participants who have the ability 
to access various reports, which include the information concerning 
ORF. Phlx has a similar rule which is applicable to its ORF fees.\12\ 
Also, the Exchange's administrative costs would be lowered as a result 
of this policy.
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    \11\ The Exchange provides NOM Participants with the ability to 
sign-up to receive certain daily reports. These reports allow NOM 
Participants to view trade data and fees prior to receiving a 
billing invoice.
    \12\ See Securities Exchange Act Release No. 62661 (August 6, 
2010), 75 FR 49544 (August 13, 2010) (SR-Phlx-2010-110). See also 
Phlx's Fee Schedule.
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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.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to 19(b)(3)(A) of the Act \13\ and Rule 19b-4(f)(6) \14\ 
thereunder.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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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 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.

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:

[[Page 78327]]

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2011-168 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-2011-168. 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 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 available publicly. All 
submissions should refer to File Number SR-NASDAQ-2011-168 and should 
be submitted on or before January 6, 2012.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-32238 Filed 12-15-11; 8:45 am]
BILLING CODE 8011-01-P