Document ID: SEC-2017-1881-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market LLC
Posted Date: 2017-11-17T05:00Z

[Federal Register Volume 82, Number 221 (Friday, November 17, 2017)]
[Notices]
[Pages 54437-54439]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24937]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82065; File No. SR-NASDAQ-2017-117]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the Exchange's Fees at Rule 7036 To Withdraw the Nasdaq Market 
Analytics Data Package From Sale

November 13, 2017.
    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 October 31, 2017, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule

[[Page 54438]]

change as described in Items I and II below, which Items have been 
prepared by the Exchange. 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

    The Exchange proposes to amend the Exchange's fees at Rule 7036 to 
withdraw the Nasdaq Market Analytics Data Package from sale.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaq.cchwallstreet.com, at the principal office of 
the Exchange, 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, 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to withdraw the Nasdaq 
Market Analytics Data Package from sale. The Nasdaq Market Analytics 
Data Package, established in 2006,\3\ consists of four products: (i) 
Market Velocity, (ii) Market Forces, (iii) Competitive Volume Weighted 
Average Price (VWAP) Benchmark, and (iv) Competitive VWAP Leaders.
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    \3\ See Securities Exchange Act Release No. 54003 (June 16, 
2006), 71 FR 36141 (June 23, 2006) (SR-NASD-2006-056).
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    Market Velocity and Market Forces are real-time data products. 
Market Velocity measures the frequency and size of orders submitted to 
the trading system. Market Forces separates orders into buy and sell 
categorizes to indicate market direction. Market Velocity and Market 
Forces may include orders not visible in existing quote and order data 
feeds.
    The Competitive VWAP Benchmark is an intra-day, query-response 
product that provides the best and worst average price performance by 
market makers trading on the Nasdaq Market Center execution system. The 
Benchmark is used to compare the purchaser's trade performance to those 
benchmarks. Competitive VWAP Leaders is a delayed product that 
identifies participants with the most experience trading a particular 
stock or type of stock, ranking participants by share volume, weighted 
by the difference between market participant VWAP and overall VWAP.
    The Exchange proposes to withdraw the Nasdaq Market Analytics Data 
Package from the market. The Package was introduced in 2006, and has 
remained basically unchanged since then, notwithstanding substantial 
changes in technology and analytical techniques over that period. The 
product has generated little customer interest, and only a small number 
of customers currently purchase subscriptions.\4\
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    \4\ Indeed, neither the Competitive VWAP Benchmark nor the 
Competitive VWAP Leaders has any customers at all.
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    Recently, customers have inquired about possible modifications to 
the product. Specifically, customers expressed concern that data 
contained in the product may reveal too much information about the 
trading strategies of participants on the Exchange. While the Exchange 
does not believe that these concerns are well-founded, given that the 
information content of the product has been stable over time and the 
number of customer for the product is extremely small, the Exchange 
continually evaluates the views of its customers in developing and 
maintaining its product offerings and initiated a review of the 
product.
    Upon such review, the Exchange has determined that modifying the 
product in keeping with customer requests would not be cost-effective 
in light of the small amount of revenue that the product generates. 
Given the age of the product, the small amount of revenue generated, 
and the cost of modifications, the Exchange has decided to withdraw the 
product from the market, effective immediately.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\5\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\6\ in particular, in that it is designed to promote 
just and equitable principles of trade, 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. 
Specifically, the proposed withdrawal of the Nasdaq Market Analytics 
Data Package will remove a potentially controversial product from the 
market. In light of the age of the product, the small number of 
subscribers for that product, the fact that modifying the product would 
not be cost-effective, and the concerns expressed by some market 
participants, the Exchange believes that the proposal to remove this 
product from the market strikes the correct balance to promote just and 
equitable principles of trade, 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.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. In terms of inter-market 
competition, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive, or rebate opportunities available at other venues to be more 
favorable. In such an environment, the Exchange must continually adjust 
its fees to remain competitive with other exchanges and with 
alternative trading systems that have been exempted from compliance 
with the statutory standards applicable to exchanges. Because 
competitors are free to modify their own fees in response, and because 
market participants may readily adjust their order routing practices, 
the Exchange believes that the degree to which fee changes in this 
market may impose any burden on competition is extremely limited.
    The proposed withdrawal of the Nasdaq Market Analytics Data Package 
is an example of the impact of market forces on the Exchange. Because 
customers had not purchased the product in sufficient numbers to 
economically justify further investment, the Exchange decided to 
discontinue the product. This is precisely how competitive markets 
operate.
    The withdrawal of the Nasdaq Market Analytics Data Package will not 
impose any burden on competition as the Package will no longer be 
offered.

[[Page 54439]]

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 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\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and the text of 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. The Commission has waived this requirement.
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    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)(iii) \10\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
The Commission notes that the Exchange's customers have expressed 
concern that data contained in the Nasdaq Market Analytics Data Package 
may reveal too much information about the trading strategies of 
participants on the Exchange, and have inquired about possible 
modifications to the product. The Commission also notes that, in light 
of the age of the product, the small number of subscribers, the cost of 
modifying the product, and the concerns raised by some market 
participants, the Exchange has determined to remove the product. 
Accordingly, the Commission hereby waives the 30-day operative delay 
and designates the proposal operative upon filing.\11\
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    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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 change should be approved or 
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 email to [email protected]. Please include 
File Number SR-NASDAQ-2017-117 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2017-117. This 
file number should be included on the subject line if email 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 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NASDAQ-2017-117 and should 
be submitted on or before December 8, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-24937 Filed 11-16-17; 8:45 am]
 BILLING CODE 8011-01-P