Document ID: SEC-2010-0269-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2010-02-23T05:00Z

[Federal Register Volume 75, Number 35 (Tuesday, February 23, 2010)]
[Notices]
[Pages 8160-8161]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-3467]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61524; File No. SR-NASDAQ-2010-015]

 Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Proposed Rule Change To Apply Retroactively a 
Correction of a Typographical Error in Rule 7018

February 16, 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 January 26, 2010, 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 prepared by 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

    NASDAQ is filing a proposed rule change to apply retroactively to 
the period from July 24, 2009 through January 25, 2010 the correction 
made by SR-NASDAQ-2010-014 of a typographical error \3\ formerly in 
Rule 7018.\4\ There is no proposed rule text.
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    \3\ The Commission notes that the ``typographical error'' is 
more accurately characterized as a drafting error by Nasdaq that 
resulted in the omission and misplacement of rule language.
    \4\ See SR-NASDAQ-2010-014 (January 26, 2010), Securities 
Exchange Act Release No. 61515 (February 12, 2010).
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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 recently submitted an immediately effective filing to 
correct a typographical error in Rule 7018.\5\ The purpose of this 
filing is [sic] apply the correction of the typographical error 
retroactively to the period from July 24, 2009 through January 25, 
2010.
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    \5\ SR-NASDAQ-2010-014 (January 26, 2010).
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    In SR-NASDAQ-2009-072,\6\ NASDAQ submitted a proposed rule change 
to make clerical changes designed to streamline and simplify Rule 7018. 
As stated in the ``Purpose'' section of NASDAQ's Form 19b-4 filing, 
``[n]one of the clerical changes will modify any fee assessed or credit 
earned for trading on the NASDAQ Market Center.'' However, due to a 
typographical error, Exhibit 5 introduced inaccuracies into the 
provisions of the rule describing the fees for orders in securities 
listed on the New York Stock Exchange (``NYSE'') that are routed to 
other venues without attempting to execute in NASDAQ for the full size 
of the order prior to routing. This portion of the fee schedule had 
previously been divided between sections governing fees for orders in 
NYSE-listed securities executed at NYSE and fees for orders executed at 
other venues. Both sections had included catch-all provisions governing 
``other'' orders that did not fit into more defined categories of 
routed orders; these catch-all provisions apply specifically to 
directed orders that are not designated as intermarket sweep orders 
(i.e., immediate-or-cancel orders that are directed to route to a venue 
specified by the member, and that may be executed by the receiving 
venue only if its quotation is at the national best bid or offer). In 
the case of such orders routed to NYSE, the fee is either $0.0020 per 
share executed, or $0.0019 per share executed for members with an 
average daily volume through the Nasdaq Market Center in all securities 
during the month of more than 35 million shares of liquidity provided. 
In the case of such orders routed to other venues, the fee is $0.0035 
per share executed. However, language describing the fee for routing to 
other venues was

[[Page 8161]]

inadvertently deleted, while language describing the fee for routing to 
NYSE was moved but without language that had formerly limited its 
applicability to orders sent to NYSE. Accordingly, a reader of the 
amended rule may conclude that the fee of $0.0020 or $0.0019 per share 
executed is applicable to ``other'' orders routed to venues other than 
NYSE. \7\
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    \6\ Securities Exchange Act Release No. 60430 (August 4, 2009), 
74 FR 40279 (August 11, 2009) (SR-NASDAQ-2009-072).
    \7\ The Commission expects all SROs to carefully review proposed 
rule changes before they are filed with the Commission.
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    As noted above, however, the filing that introduced this error in 
Rule 7018 stated that it was not modifying any fees or credits, and in 
fact, was filed as a ``stated policy, practice, or interpretation with 
respect to the meaning, administration, or enforcement of an existing 
rule'' under SEC Rule 19b-4(f)(1) \8\ rather than a fee change under 
SEC Rule 19b-4(f)(2).\9\ Moreover, NASDAQ's intent not to modify fees 
through SR-NASDAQ-2009-072 was reflected in the Commission's notice of 
the filing on the SEC Web site \10\ and in the Federal Register,\11\ 
and the applicable fees have been accurately described in the pricing 
schedule that appears on NASDAQ's Web site.\12\ NASDAQ has been billing 
members in accordance with the correct fees since the effective date of 
SR-NASDAQ-2009-072 on July 24, 2009, and accordingly believes that all 
of its members are cognizant of the correct fee. NASDAQ submitted SR-
NASDAQ-2010-014\13\ on an immediately effective basis to correct the 
error and is now submitting this filing to seek Commission approval to 
apply the correction retroactively to the period from July 24, 2009 
through January 25, 2010.
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    \8\ 17 CFR 240.19b-4(f)(1).
    \9\ 17 CFR 240.19b-4(f)(2).
    \10\ See http://www.sec.gov/rules/sro/nasdaq/2009/34-60430.pdf.
    \11\ See Securities Exchange Act Release No. 60430 (August 4, 
2009), 74 FR 40279 (August 11, 2009) (SR-NASDAQ-2009-072).
    \12\ See http://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.
    \13\ SR-NASDAQ-2010-014 (January 26, 2010).
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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,\14\ in general, and with 
Section 6(b)(4) of the Act,\15\ 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. The proposed rule change will 
ensure that a recently filed correction of a typographical error in 
NASDAQ Rule 7018 is applied retroactively throughout the entire period 
when the error was in the rule.
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    \14\ 15 U.S.C. 78f.
    \15\ 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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be 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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2010-015 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-2010-015. 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 Nasdaq. 
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-
015 and should be submitted on or before March 16, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Florence E. Harmon,
Deputy Secretary.
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    \16\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2010-3467 Filed 2-22-10; 8:45 am]
BILLING CODE 8011-01-P