Document ID: SEC-2007-0581-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NASDAQ Stock Market LLC
Posted Date: 2007-04-20T04:00Z

[Federal Register: April 20, 2007 (Volume 72, Number 76)]
[Notices]               
[Page 20002-20004]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20ap07-131]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55634; File No. SR-NASDAQ-2007-036]

 
Self-Regulatory Organizations; the NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify Pricing for Nasdaq Members Using the Nasdaq Market Center

April 16, 2007.
    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 March 30, 2007, The NASDAQ Stock Market LLC (``Nasdaq'') 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 substantially 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 
immediately upon filing.
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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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    The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.

[[Page 20003]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to modify the pricing for Nasdaq members using the 
Nasdaq Market Center. Nasdaq will implement this rule change on April 
2, 2007.
    The text of the proposed rule change is below. Proposed new 
language is italicized.\5\
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    \5\ Changes are marked to the rule text that appears in the 
electronic Nasdaq Manual found at http://nasdaq.complinet.com, as 

amended by Securities Exchange Act Release No. 55576 (April 3, 
2007), 72 FR 17969 (April 10, 2007) (SR-NASDAQ-2007-026), on an 
immediately effective basis.
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* * * * *
7018. Nasdaq Market Center Order Execution and Routing
    (a) The following charges shall apply to the use of the order 
execution and routing services of the Nasdaq Market Center by members 
for all securities that it trades.

 Fees for Order Execution in the Nasdaq Market Center; Fees for Routing
   of Orders in All Securities to Venues Other Than the New York Stock
   Exchange (``NYSE''); and Fees for Routing Orders in Exchange-Traded
                              Funds to NYSE
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------------------------------------------------------------------------
Charge to member entering order that
 executes in the Nasdaq Market Center
 or attempts to execute in the Nasdaq
 Market Center prior to routing:
    Members with an average daily        $0.0026 per share executed for
     volume through the Nasdaq Market     securities priced at $1 or
     Center in all securities during      more per share.
     the month of (i) more than 35       0.1% of the total transaction
     million shares of liquidity          cost for executions in the
     provided, and (ii) more than 55      Nasdaq Market Center of
     million shares of liquidity          securities priced at less than
     accessed and/or routed; or members   $1 per share.
     with an average daily volume        0.3% of the total transaction
     through the Nasdaq Market Center     cost for routed orders in
     in all securities during the month   securities priced at less than
     of (i) more than 25 million shares   $1 per share.
     of liquidity provided, and (ii)
     more than 65 million shares of
     liquidity accessed and/or routed.
    Members with an average daily        $0.0028 per share executed for
     volume through the Nasdaq Market     securities priced at $1 or
     Center in all securities during      more per share.
     the month of (i) more than 20       0.1% of the total transaction
     million shares of liquidity          cost for executions in the
     provided, and (ii) more than 35      Nasdaq Market Center of
     million shares of liquidity          securities priced at less than
     accessed and/or routed.              $1 per share.
                                         0.3% of the total transaction
                                          cost for routed orders in
                                          securities priced at less than
                                          $1 per share.
    Other members......................  $0.0030 per share executed for
                                          securities priced at $1 or
                                          more per share.
                                         0.1% of the total transaction
                                          cost for executions in the
                                          Nasdaq Market Center of
                                          securities priced at less than
                                          $1 per share.
                                         0.3% of the total transaction
                                          cost for routed orders in
                                          securities priced at less than
                                          $1 per share.
    Charge to member entering order      $0.0035 per share executed for
     that does not attempt to execute     a Directed Intermarket Sweep
     in the Nasdaq Market Center prior    Order for securities priced at
     to routing.                          $1 or more per share.
                                         $0.0030 per share executed for
                                          other orders for securities
                                          priced at $1 or more per
                                          share.
                                         0.3% of the total transaction
                                          cost for routed orders in
                                          securities priced at less than
                                          $1 per share.
Surcharge for order routed to the        $0.01 per share executed.
 American Stock Exchange and charged a
 fee by the specialist.
Credit to member providing liquidity
 through the Nasdaq Market Center:
    Members with an average daily        $0.0025 per share executed (or
     volume through the Nasdaq Market     $0, in the case of executions
     Center in all securities during      against Quotes/Orders in the
     the month of more than 35 million    Nasdaq Market Center at less
     shares of liquidity provided.        than $1.00 per share).
    Members with an average daily        $0.0022 per share executed (or
     volume through the Nasdaq Market     $0, in the case of executions
     Center in all securities during      against Quotes/Orders in the
     the month of more than 20 million    Nasdaq Market Center at less
     shares of liquidity provided.        than $1.00 per share).
    Other members......................  $0.0020 per share executed (or
                                          $0, in the case of executions
                                          against Quotes/Orders in the
                                          Nasdaq Market Center at less
                                          than $1.00 per share).
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 Fees for Routing Orders in Securities Other Than Exchange-Traded Funds
                                 to NYSE
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------------------------------------------------------------------------
Order that attempts to execute in the    $0.000225 per share executed
 Nasdaq Market Center prior to routing    for securities priced at $1 or
 and being executed at NYSE.              more per share.
                                         0.3% of the total transaction
                                          cost for routed orders in
                                          securities priced at less than
                                          $1 per share.
Order that does not attempt to execute   $0.0035 per share executed for
 in the Nasdaq Market Center prior to     a Directed Intermarket Sweep
 routing and being executed at NYSE.      Order for securities priced at
                                          $1 or more per share.
                                         $0.000275 per share executed
                                          for other orders for
                                          securities priced at $1 or
                                          more per share.
                                         0.3% of the total transaction
                                          cost for routed orders in
                                          securities priced at less than
                                          $1 per share.
Order that is routed to NYSE and then    A pass-through of any routing
 routed to another venue for execution.   fees charged to Nasdaq by
                                          NYSE.
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[[Page 20004]]

* * * * *

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.

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

1. Purpose
    Nasdaq is establishing a fee of $0.0035 per share executed for 
orders that are designated as Directed Intermarket Sweep Orders (unless 
the order is for a security priced under $1, in which case the fee is 
0.3% of the transaction value). As described in SR-NASDAQ-2007-020,\6\ 
a Directed Order allows a market participant to enter an order into 
Nasdaq that is designated for routing to another exchange without first 
checking the Nasdaq book. By designating a Directed Order as an 
Intermarket Sweep Order, the market participant entering the order 
represents that it is complying with the requirements of Regulation NMS 
Rules 610 and 611.\7\ Because these orders bypass the Nasdaq book, and 
because Nasdaq will incur costs for post-trade surveillance of members' 
compliance with these rules, Nasdaq believes that an increased routing 
fee of $0.0035 is warranted.
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    \6\ See Securities Exchange Act Release No. 55405 (March 6, 
2007), 72 FR 11069 (March 12, 2007).
    \7\ 17 CFR 242.610 and 242.611.
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2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\8\ in general, and with Section 
6(b)(4) of the Act,\9\ 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. Nasdaq believes that an increased 
fee for Directed Intermarket Sweep Orders is appropriate in light of 
their special characteristics.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(6)(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.

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 \10\ and subparagraph (f)(2) of Rule 19b-4 
thereunder because it establishes or changes a due, fee, or other 
charge.\11\ 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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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 C FR 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 Number SR-NASDAQ-2007-036 on the subject line.

Paper Comments:

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NASDAQ-2007-036. 
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 inspection 
and copying in the Commission's Public Reference Room. Copies of such 
filing also will be available for inspection and copying at the 
principal offices 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-2007-036 and 
should be submitted on or before May 11, 2007.
For the Commission, by the Division of Market Regulation, pursuant to 
delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-7485 Filed 4-19-07; 8:45 am]

BILLING CODE 8010-01-P