Document ID: SEC-2010-0209-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2010-02-08T05:00Z

[Federal Register: February 8, 2010 (Volume 75, Number 25)]
[Notices]               
[Page 6246-6248]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08fe10-102]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61451; File No. SR-NASDAQ-2010-012]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Describing the NASDAQ Ouch BBO Feed

February 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 January 22, 2010, The NASDAQ Stock Market LLC (``Nasdaq'' or the 
``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 Nasdaq. Nasdaq has 
designated the proposed rule change as constituting a rule change under 
Rule 19b-4(f)(6) under the Act,\3\ which renders the proposal effective 
upon filing with the Commission. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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

    Nasdaq submits this proposal regarding the availability of the 
NASDAQ Ouch BBO Feed, a data feed that represents Nasdaq's internal 
view of the best bid and offer among all market centers other than 
Nasdaq (the ``BBO''), which is provided at no cost.

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 6247]]

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

1. Purpose
    Nasdaq submits this proposal regarding the availability of the 
NASDAQ Ouch BBO Feed, a data feed that represents Nasdaq's internal 
view of the best bid and offer among all market centers other than 
Nasdaq. The NASDAQ Ouch BBO Feed is available to all NASDAQ members 
equally at no charge, and offers all firms transparent, real-time data 
concerning Nasdaq's internal view of the BBO. This data feed reflects 
Nasdaq's view of the BBO, at any given time, based on orders executed 
on Nasdaq and updated quote information from the SIPs. Nasdaq makes the 
NASDAQ Ouch BBO Feed available to all market participants via 
subscription through an established connection to Nasdaq through 
extranets, direct connection, and Internet-based virtual private 
networks.
    The NASDAQ Ouch BBO Feed contains the following data elements: 
Symbol, bid price, and ask price.\4\ Unlike the Nasdaq TotalView feed, 
the Ouch BBO feed does not contain information about individual orders, 
either those residing within the Nasdaq system or those executed or 
routed by Nasdaq. Unlike the SIP feeds containing the National Best Bid 
and Offer (``NBBO''), the Ouch BBO Feed does not identify either the 
market center quoting the BBO or the size of the BBO quotes. It merely 
contains the symbol and bid and offer prices.
---------------------------------------------------------------------------

    \4\ Nasdaq also provides a time stamp and message type field for 
reference.
---------------------------------------------------------------------------

    By making the NASDAQ Ouch BBO Feed data available, Nasdaq enhances 
market transparency and fosters competition among orders and markets. 
Member firms may use the NASDAQ Ouch BBO Feed to more accurately price 
their orders based on Nasdaq's view of what the BBO is at any point in 
time, which may not be reflected in the official NBBO due to latencies 
inherent in the NBBO's dissemination. As a consequence, member firms 
may more accurately price their orders on Nasdaq, thus avoiding price 
adjustments by Nasdaq based on a quote that is no longer available. 
Additionally, members can price orders more aggressively to narrow the 
NBBO and provide better reference prices for investors.
    At this time, Nasdaq does not have plans to charge an additional 
fee associated with the receipt of the NASDAQ Ouch BBO Feed. Should 
Nasdaq determine to charge fees associated with the NASDAQ Ouch BBO 
Feed, Nasdaq will submit a proposed rule change to the Commission in 
order to implement those fees.
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 Sections 
6(b)(5) of the Act,\6\ in particular in that it 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. Nasdaq believes that this 
proposal is in keeping with those principles by promoting increased 
transparency through the dissemination of NASDAQ Ouch BBO Feed data and 
by clarifying its availability.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    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 from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \7\ and Rule 19b-
4(f)(6) thereunder.\8\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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. 
Nasdaq has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \9\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6) \10\ permits the Commission to 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. Nasdaq requests that 
the Commission waive the 30-day operative delay because it would permit 
Nasdaq to immediately provide the information regarding the NASDAQ Ouch 
BBO Feed access requirements to market participants. The Commission 
believes that waiving the 30-day operative delay \11\ is consistent 
with the protection of investors and the public interest and designates 
the proposal operative upon filing.
---------------------------------------------------------------------------

    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ For 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. 
78c(f).
---------------------------------------------------------------------------

    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.

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-2010-012 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-2010-012. 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/

[[Page 6248]]

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, 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 publicly available. All 
submissions should refer to File Number SR-NASDAQ-2010-012 and should 
be submitted on or before March 1, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-2580 Filed 2-5-10; 8:45 am]
BILLING CODE 8011-01-P