Document ID: SEC-2010-1700-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2010-11-05T04:00Z

[Federal Register Volume 75, Number 214 (Friday, November 5, 2010)]
[Notices]
[Pages 68385-68387]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-27943]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63218; File No. SR-NASDAQ-2010-140]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Establish a Flexible 60-Day Trial Period for New Users of Correlix 
Latency Measurement Services

November 1, 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 26, 2010, 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 and 
II 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 the 
Substance of the Proposed Rule Change

    NASDAQ proposes to change to establish a flexible 60-day free trial 
period for new users of Correlix latency measurement services, and to 
codify prices for those services.
    The text of the proposed rule change is available at http://nasdaq.cchwallstreet.com/, at NASDAQ's principal office, on the 
Commission's Web site at http://www.sec.gov, and at the Commission's 
Public Reference Room. The Exchange will implement the proposed rule 
change immediately.

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.

[[Page 68386]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Correlix provides users of the NASDAQ Market Center (``System'') 
real-time analytical tools to measure the latency of orders to and from 
that System. Correlix shares with the Exchange a portion of the 
revenues it receives from subscribers.\3\ Recently, the Commission 
approved a one-time 60-day free trial period for parties wishing to 
evaluate the Correlix RaceTeam offering for the NASDAQ Market 
Center.\4\ That initial one-time free trial period expired on August 
28, 2010. The instant filing seeks Commission approval to: (1) Modify 
the free trial period so that all parties will be eligible for one free 
60-day trial period whenever they initially elect to sign-up for the 
service now or in the future; and (2) codify and make transparent the 
current fees imposed by Correlix on those using the service to measure 
latency to and from the Exchange.
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    \3\ The specifics of the NASDAQ/Correlix relationship are 
detailed in SR-NASDAQ-2010-068, a separate filing also recently 
approved by the Commission. See Exchange Act Release No. 62605 (July 
30, 2010), 75 FR 47651 (August 6, 2010).
    \4\ See Exchange Act Release No. 62391 (June 28, 2010), 75 FR 
38858 (July 6, 2010).
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    The Exchange is proposing the flexible trial period so as to ensure 
that all potential Correlix users have an equal opportunity to take 
advantage of an initial free trial period to evaluate the product. 
NASDAQ also notes that the introduction of more flexibility in 
determining when to participate in the free trial period will allow 
Correlix users to introduce the product into their own technology 
infrastructure at a time of their own choosing and in coordination with 
other scheduled technology initiatives.
    Current pricing for the Correlix RaceTeam product for the NASDAQ 
market varies depending on the number of unique MPIDs and ports 
selected by the customer for monitoring by Correlix. For NASDAQ 
(including the NASDAQ Options Market), the fee is an initial $3,000 
monthly base fee for the first unique MPID monitored. For each 
additional unique MIPD sought to be monitored, an additional monthly 
charge of $1,000 is assessed. The monthly price for each unique MPID 
includes the monitoring of up to 25 NASDAQ port connections associated 
with that particular MPID. Customers that wish to exceed 25 ports per-
MPID for monitoring can purchase additional 25 port blocks for an 
additional fee of $1000 per month per MPID. To enhance transparency, 
the Exchange proposed to codify these fees.
    The Exchange believes that the above proposals will provide users 
of the NASDAQ Market Center greater transparency into the fees 
associated with latency measurement services and encourage the use of 
such services on a trial basis.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\5\ in general, and with 
Section 6(b)(5) of the Act,\6\ in particular, in that the proposal is 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, 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. In 
particular, the filing makes transparent uniform fees imposed for 
latency measurement services.
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(5).
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    In addition, the Exchange 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 the Exchange operates or controls. In 
particular, the Exchange notes that the use of Correlix latency 
measurement services is entirely voluntary and made available on a non-
discriminatory basis.
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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 proposed rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) of the Act and paragraph (f)(6) of Rule 19b-4 
thereunder, in that the proposed rule change: (i) Does not 
significantly affect the protection of investors or the public 
interest; (ii) does not impose any significant burden on competition; 
and (iii) does not become operative for 30 days after the date of the 
filing, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest; 
provided the self-regulatory organization has given the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of 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 requested that the Commission waive the 30-day 
operative delay. The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. The Commission notes that the Correlix service and 
fees sought to be codified here have already been approved by the 
Commission, and that accelerated approval of the flexible initial trial 
period will ensure that the free period is made available to all 
interested parties without delay. Accordingly, the Commission 
designates the proposed rule change operative upon filing with the 
Commission.\9\
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    \9\ For the purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78(c)(f).
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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.

[[Page 68387]]

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-2010-140 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-2010-140. 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 
available publicly. All submissions should refer to File Number SR-
NASDAQ-2010-140, and should be submitted on or before November 26, 
2010.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-27943 Filed 11-4-10; 8:45 am]
BILLING CODE 8011-01-P