Document ID: SEC-2010-1333-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2010-09-02T04:00Z

[Federal Register: September 2, 2010 (Volume 75, Number 170)]
[Notices]               
[Page 53996-53997]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02se10-97]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62785; File No. SR-NASDAQ-2010-106]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify Fees Assessed to Members Using the NASDAQ Market Center

August 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 August 25, 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 the 
Substance of the Proposed Rule Change

    NASDAQ proposes to modify pricing assessed to NASDAQ members using 
the NASDAQ Market Center. NASDAQ will implement the proposed change on 
September 1, 2010. The text of the proposed rule change is available at 
http://nasdaqomx.cchwallstreet.com/, at NASDAQ's principal office, 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, 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 proposing to reduce fees assessed members for routing 
odd-lot directed orders. NASDAQ assesses

[[Page 53997]]

different fees for orders directed to the New York Stock Exchange 
(``NYSE'') that do not attempt to execute in the Nasdaq Market Center 
prior to routing based on whether the order is an odd-lot or round-lot. 
In this regard, NASDAQ currently assesses a fee of $0.0021 for round-
lot directed orders that execute on the NYSE, an amount equal to the 
fee assessed NASDAQ by NYSE for executing such orders. NASDAQ assesses 
a fee of $0.03 on directed orders that do not attempt to execute in the 
Nasdaq Market Center prior to routing and that execute at the NYSE as 
an odd-lot transaction, and $0.01 for the odd-lot portion of a [sic] 
partial round-lot orders that do not attempt to execute in the Nasdaq 
Market Center prior to routing and that execute at the NYSE. The NYSE 
executes odd-lot orders on the Odd-lot System, a separate system 
designed to execute odd-lot interest that does not expose odd-lot 
orders to the market in the NYSE Display Book, but rather executes such 
interest against a designated maker as a contra party using a complex 
pricing formula to determine the execution price.
    The NYSE recently made technical changes that allow odd-lot 
interest to be exposed to, and executed against, the general market in 
its Display Book and is thus decommissioning its separate Odd-lot 
System.\3\ In light of the elimination of any distinction between how 
odd-lot and round-lot orders are handled by the NYSE,\4\ NASDAQ is 
making minor modifications to its pricing schedule for the routing of 
odd-lot orders directed to the NYSE through the NASDAQ Market Center. 
NASDAQ is proposing to lower the fees assessed for these directed odd-
lot orders to $0.0021 so that the fee is harmonized with the fee 
assessed NASDAQ by the NYSE for any executed directed order.
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    \3\ On July 27, 2010, the Commission approved a proposed rule 
change by the NYSE to incorporate the receipt and execution of odd-
lot interest into the round lot market and decommission the use of 
the NYSE's ``Odd-lot System.'' Securities Exchange Act Release No. 
62578 (July 27, 2010), 75 FR 45185 (August 2, 2010) (SR-NYSE-2010-
43).
    \4\ The NYSE is transitioning securities on a rolling basis 
during the month of August 2010. See http://www.nyse.com/attachment/
Trading_In_Shares_Rollout_List.xls.
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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,\5\ in general, and with Section 
6(b)(4) of the Act,\6\ 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, because NYSE 
no longer handles routed round-lot and routed odd-lot orders 
differently and assesses a single uniform fee for such orders, it is 
appropriate for NASDAQ to assess a uniform fee for routing both types 
of orders. The harmonized fees also equal the amount assessed NASDAQ by 
NYSE for executing such orders. Accordingly, NASDAQ believes that the 
reduced fees are both reasonable and equitably allocated to members.
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    \5\ 15 U.S.C. 78f.
    \6\ 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. To the contrary, 
NASDAQ believes that the reduced fee will lower costs and encourage 
competition. Because the market for order execution and routing is 
extremely competitive, members may readily direct orders to NASDAQ's 
competitors if they object to the proposed rule change.

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.\7\ 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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    \7\ 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-2010-106 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-2010-106. 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 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 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-2010-106, and should be submitted on or before 
September 23, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-21933 Filed 9-1-10; 8:45 am]
BILLING CODE 8010-01-P