Document ID: SEC-2007-1719-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NASDAQ Stock Market LLC
Posted Date: 2007-12-18T05:00Z

[Federal Register: December 18, 2007 (Volume 72, Number 242)]
[Notices]               
[Page 71727-71729]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18de07-82]                         

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56940; File No. SR-NASDAQ-2007-095]

 
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

December 11, 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 November 30, 2007, 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 substantially by Nasdaq. Pursuant to Section 
19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)\4\ thereunder, 
Nasdaq has designated this proposal as establishing or changing a 
member due, fee, or other charge, which renders the proposed rule 
change effective immediately upon filing.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 7 CFR 240.19b-4.
    \3\ 5 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 7 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.

[[Page 71728]]

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 proposed rule change 
on December 3, 2007. The text of the proposed rule change is available 
at http://nasdaq.complinet.com, Nasdaq, 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, 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 changes to its fees for routing odd lot and 
mixed lot orders to the New York Stock Exchange (``NYSE'') and NYSE 
Arca. In the case of odd lot orders routed to NYSE Arca, NYSE Arca 
charges Nasdaq a fee of $0.03 per share executed for securities listed 
on an exchange other than Nasdaq and a fee of $0.004 per share executed 
for Nasdaq-listed securities. \5\ Nasdaq is proposing to pass these 
fees through directly to its members whose orders are routed to NYSE 
Arca, \6\ but only if the orders are entered into Nasdaq as odd lot 
orders. Thus, if Nasdaq partially executes an order and routes a 
remaining odd lot, Nasdaq's normal routing fees would apply to the odd 
lot.
---------------------------------------------------------------------------

    \5\ See NYSE Arca Equities Fee Schedule (October 1, 2007) 
(available at http://www.nyse.com/pdfs/NYSEArca_Equities_Fees.pdf
).

    \6\ A fee of 0.3% of the total transaction cost would apply to 
orders in securities priced at less than $1 per share, which is 
higher than NYSE Arca's fee for executing such orders but consistent 
with Nasdaq's fee for routing other orders priced under $1.
---------------------------------------------------------------------------

    In the case of odd lot orders and the odd lot portion of partial 
odd lot orders routed to NYSE, NYSE charges $0.0004 per share executed 
for securities other than exchange-traded funds (``ETFs''), and charges 
its regular execution fee for ETFs.\7\ However, various NYSE rules and 
policies discourage the submission of odd lots to the NYSE, and Nasdaq 
therefore believes that it is appropriate to use its fee schedule to 
discourage the submission of routable odd lot and mixed lot orders into 
Nasdaq.\8\ Specifically, in the case of an odd lot that does not check 
the Nasdaq book prior to routing, Nasdaq will charge $0.03 per share 
executed, while in the case of the odd lot portion of a partial round 
lot that does not check the book, Nasdaq will charge $0.01 per share 
executed. Nasdaq's current routing fees will remain in effect for 
orders that check the book, since in these cases, the routing of the 
odd lot to NYSE may be due to the order being partially executed by 
Nasdaq. A fee of 0.3% of the total transaction cost will apply to 
orders in securities priced at less than $1 per share.
---------------------------------------------------------------------------

    \7\ See NYSE 2007 Price List (available at http://www.nyse.com/pdfs/2007pricelist.pdf
).

    \8\ Nasdaq also notes that NYSE Arca charges $0.03 per share for 
routing odd lot orders in non-Nasdaq securities, and Nasdaq's 
routing fees will be equal to or lower than this level.
---------------------------------------------------------------------------

2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\9\ in general, and with Section 
6(b)(4) of the Act,\10\ 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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 \11\ 
and Rule 19b-4(f)(2) thereunder,\12\ 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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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-2007-095 on the subject line.

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-2007-095. 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-

[[Page 71729]]

NASDAQ-2007-095 and should be submitted on or before January 8, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-24466 Filed 12-17-07; 8:45 am]

BILLING CODE 8011-01-P