Document ID: SEC-2010-0799-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2010-06-02T04:00Z

[Federal Register: June 2, 2010 (Volume 75, Number 105)]
[Notices]               
[Page 30887-30889]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jn10-141]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62176; File No. SR-NASDAQ-2010-063]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Routing Fees

May 26, 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 May 26, 2010, The NASDAQ Stock Market LLC (``NASDAQ'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II, and III, 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to modify Rule 7050 governing pricing for 
NASDAQ members using the NASDAQ Options Market (``NOM''), NASDAQ's 
facility for executing and routing standardized equity and index 
options. Specifically, NOM proposes to expand the list of options that 
will be assessed routing fees of $0.30 per contract for customer orders 
and $0.55 per contract for Firm and Market Maker orders that are routed 
from NOM to NASDAQ OMX PHLX, Inc. (``Phlx'').
    While changes to the Fee Schedule pursuant to this proposal are 
effective upon filing, the Exchange has designated these changes to be 
operative for transactions on June 1, 2010.
    The text of the proposed rule change is set forth below. Proposed 
new text is in italics and deleted text is in brackets.
* * * * *

7050. NASDAQ Options Market

    The following charges shall apply to the use of the order execution 
and routing services of the NASDAQ Options Market by members for all 
securities.
    (1)-(3) No Change.
    (4) Fees for routing contracts to markets other than the NASDAQ 
Options Market shall be assessed as provided below. The current fees 
and a historical record of applicable fees related to orders routed to 
other exchanges shall be posted on the NasdaqTrader.com Web site.

----------------------------------------------------------------------------------------------------------------
                                    Exchange                                      Customer     Firm        MM
----------------------------------------------------------------------------------------------------------------
BATS...........................................................................       0.36       0.55       0.55
BOX............................................................................       0.06       0.55       0.55
CBOE...........................................................................       0.06       0.55       0.55
ISE............................................................................       0.06       0.55       0.55
NYSE Arca Penny Pilot..........................................................       0.50       0.55       0.55
NYSE Arca Non Penny Pilot......................................................       0.06       0.55       0.55
NYSE AMEX......................................................................       0.06       0.55       0.55
PHLX (for all options other than the below listed options).....................       0.06       0.55       0.55
PHLX (for the following options only): AA, AAPL, ABK, ABX, AIG, ALL, AMD, AMR,        0.30       0.55       0.55
 AMZN, ARIA, AXP, BAC, BRCD, C, CAT, CIEN, CIGX, CSCO, DELL, DIA, DNDN, DRYS,
 EBAY, EK, F, FAS, FAZ, GDX, GE, GLD, GLW, GS, HAL, IBM, INTC, IWM, IYR, JPM,
 LVS, MGM, MOT, MSFT, MU, NEM, NOK, NVDA, ONNN, ORCL, PALM, PFE, POT, QCOM,
 QID, QQQQ, RIG, RIMM, RMBS, SBUX, SDS, SIRI, SKF, SLV, SMH, SNDK, SPY, T, TBT,
 TZA, UAUA, UNG, USO, UYG, V, VALE, VZ, WYNN, X, XHB, XLF, XRX and YHOO........
----------------------------------------------------------------------------------------------------------------

* * * * *
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nasdaqomx.cchwallstreet.com, at

[[Page 30888]]

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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NASDAQ is proposing to modify Rule 7050 governing the fees assessed 
for options orders entered into NOM but routed to and executed on Phlx. 
Specifically, NASDAQ is proposing to expand the number of options to 
which certain routing fees apply to reflect the expansion of Phlx's Fee 
Schedule for rebates for adding and fees for removing liquidity.\3\
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    \3\ See SR-Phlx-2010-73 (May 20, 2010). For a description of the 
rebates for adding and fees for removing liquidity on Phlx's Fee 
Schedule, See Securities Exchange Act Release Nos. 61684 (March 10, 
2010), 75 FR 13189 (March 18, 2010) (SR-Phlx-2010-33); 61961 (April 
22, 2010), 75 FR 22881 (April 30, 2010) (SR-Phlx-2010-61).
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    NASDAQ currently assesses a $0.30 per contract routing fee for 
customer orders, and a $0.55 per contract routing fee for Firm and 
Market Maker orders routed from NOM to Phlx for options that are 
subject to rebates for adding and fees for removing liquidity as 
described in the Phlx Fee Schedule. To reflect the additions Phlx is 
making to its Fee Schedule, NASDAQ proposes to add the following 
twenty-five options to the table set forth in Rule 7050(4): Ambac 
Financial Group, Inc. (``ABK''), Barrick Gold Corporation (``ABX''), 
Ariad Pharmaceuticals, Inc. (``ARIA''), American Express Company 
(``AXP''), Ciena Corp. (``CIEN''), Star Scientific, Inc. (``CIGX''), 
Dendreon Corp. (``DNDN''), eBay Inc. (``EBAY''), Corning Inc. 
(``GLW''), Halliburton Company (``HAL''), iShares Dow Jones US Real 
Estate (``IYR''), Motorola, Inc., (``MOT''), NVIDIA Corporation 
(``NVDA''), ON Semiconductor Corp. (``ONNN''), Oracle Corp. (``ORCL''), 
ProShares UltraShort, QQQ (``QID''), Transocean Ltd. (``RIG''), Rambus, 
Inc. (``RMBS''), ProShares UltraShort S&P500 (``SDS''), ProShares 
UltraShort 20+ Year Treasury (''TBT''), Visa, Inc. (``V''), Vale S.A. 
(``VALE''), SPDR S&P Homebuilders (``XHB''), Xerox Corp. (``XRX'') and 
Yahoo! Inc. (``YHOO'').
    The Exchange is proposing these fees to recoup the majority of 
transaction and clearing costs associated with routing orders to Phlx. 
As with all fees, the Exchange may adjust these routing fees by filing 
a new proposed rule change.
    While changes to the Fee Schedule pursuant to this proposal are 
effective upon filing, the Exchange has designated these changes to be 
operative for transactions on June 1, 2010.
2. Statutory Basis
    NASDAQ believes that the proposed rule changes are consistent with 
the provisions of Section 6 of the Act,\4\ in general, and with Section 
6(b)(4) of the Act,\5\ 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. The Exchange believes the proposed 
fee changes are equitable in that they apply uniformly to all similarly 
situated participants on NOM. The Exchange also believes that the 
proposed fee changes are reasonable because the Exchange is seeking to 
recoup the costs incurred for options orders entered into NOM but 
routed to and executed on Phlx.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(4).
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    NASDAQ is one of eight options market in the national market system 
for standardized options. Joining NASDAQ and electing to trade options 
is entirely voluntary. Under these circumstances, NASDAQ's fees must be 
competitive and low in order for NASDAQ to attract order flow, execute 
orders, and grow as a market. NASDAQ thus believes that its fees are 
fair and reasonable and consistent with the Exchange Act.

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.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \6\ and paragraph (f)(2) of Rule 19b-4 \7\ 
thereunder. 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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    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 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-2010-063 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-2010-063. 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

[[Page 30889]]

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 
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-2010-063 and should 
be submitted on or before June 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. 2010-13158 Filed 6-1-10; 8:45 am]
BILLING CODE 8011-01-P