Document ID: SEC-2007-0911-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NASDAQ Stock Market LLC
Posted Date: 2007-07-06T04:00Z

[Federal Register: July 6, 2007 (Volume 72, Number 129)]
[Notices]               
[Page 37065-37067]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06jy07-117]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55979; File No. SR-NASDAQ-2007-055]

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

June 28, 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 May 29, 2007, 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, II, 
and III below, which Items have been substantially prepared by Nasdaq. 
Nasdaq filed the proposal pursuant to Section 19(b)(3)(A)(ii) of the 
Act \3\ and

[[Page 37066]]

Rule 19b-4(f)(2) \4\ thereunder, as establishing or changing a member 
due, fee, or other charge, which renders the proposed rule change 
effective upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to modify pricing for Nasdaq members using the 
Nasdaq Market Center. Nasdaq will implement this rule change on June 1, 
2007. The text of the proposed rule change is available at Nasdaq, 
http://www.nasdaq.com, and 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, the Exchange 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. The Exchange 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 increasing its fees for routing orders in securities 
other than exchange-traded funds to the New York Stock Exchange 
(``NYSE'') in instances where the order does not check the Nasdaq book 
prior to routing. The current fees for such orders are $0.0035 per 
share executed for a Directed Intermarket Sweep 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, and 0.3% of the 
total transaction cost for routed orders in securities priced at less 
than $1 per share. The fees for Directed Intermarket Sweep Orders and 
transactions at under $1 per share will remain unchanged. Effective 
June 1, 2007, however, the fee of $0.000275 per share executed for 
securities priced at $1 or more per share will be available only if a 
member has an average daily volume through the Nasdaq Market Center in 
all securities during the month of more than 35 million shares of 
liquidity provided; members with an average daily volume through the 
Nasdaq Market Center in all securities during the month of more than 20 
million shares of liquidity provided will pay $0.000325 per share 
executed, and other members will pay $0.00035.
    Nasdaq is also changing the means of calculating whether members 
qualify for reduced fees when accessing liquidity in the Nasdaq Market 
Center, routing to venues other than NYSE, and/or routing orders for 
exchange-traded funds to the NYSE. These fees are determined by a 
member's average daily volume of shares of liquidity provided, and its 
average daily volume of shares of liquidity accessed and/or routed. 
Nasdaq will not count orders that do not attempt to execute in Nasdaq 
prior to routing to other venues in determining a member's average 
daily volume of shares of liquidity accessed and/or routed.\5\
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    \5\ Nasdaq is also deleting obsolete language that described 
pricing temporarily in effect in March 2007 for securities priced 
under $1.
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    The changes are designed to enhance the quality of Nasdaq's market 
by providing an incentive for members to enter orders that check the 
Nasdaq book prior to routing. An increase in the extent to which 
members check the book will in turn encourage liquidity providers to 
post executable quotes in Nasdaq. Moreover, orders that check the 
Nasdaq book have an opportunity to post to the book if they are not 
immediately executable in Nasdaq or elsewhere, and therefore may 
themselves serve as a source of liquidity provision in Nasdaq. In a 
Regulation NMS trading environment, market participants must seek the 
best immediately executable price, and therefore the ability to 
encourage liquidity provision will be key to a market's ability to 
compete. Moreover, in situations where market centers are quoting the 
same price, the pricing change will provide an incentive for market 
participants to access liquidity in Nasdaq before accessing it 
elsewhere. To the extent that market participants do enter orders that 
route immediately, moreover, the pricing change will offer a better 
price to market participants that nevertheless contribute to market 
quality by providing liquidity.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\6\ in general, and with Section 
6(b)(4) of the Act,\7\ 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 the fee change 
reflects an allocation of fees that recognizes the benefits to Nasdaq 
market quality of liquidity provision and orders that access liquidity 
in Nasdaq prior to routing.
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    \6\ 15 U.S.C. 78f.
    \7\ 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 foregoing proposed rule change has become effective upon filing 
with the Commission pursuant to Section 19(b)(3)(A)(ii) of the Act \8\ 
and Rule 19b-4(f)(2) thereunder,\9\ in that the proposed rule change 
establishes or changes a member due, fee, or other charge imposed by 
the self-regulatory organization. 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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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 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-2007-055 on the subject line.

[[Page 37067]]

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-2007-055. 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, 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 available publicly. All submissions should refer to 
File Number SR-NASDAQ-2007-055 and should be submitted on or before 
July 27, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-13072 Filed 7-5-07; 8:45 am]

BILLING CODE 8010-01-P