Document ID: SEC-2010-1165-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2010-08-04T04:00Z

[Federal Register: August 4, 2010 (Volume 75, Number 149)]
[Notices]               
[Page 47053-47054]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04au10-105]                         

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SECURITIES AND EXCHANGE COMMISSION

Release No. 34-62592; File No. SR-NASDAQ-2010-095)

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Increase Closing Cross Fees for Market-on-Close and Limit-on-Close 
Orders

July 29, 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 July 28, 2010, The NASDAQ Stock Market LLC (``NASDAQ'') 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. 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

    NASDAQ proposes to increase closing cross fees for Market-on-Close 
and Limit-on-Close orders. NASDAQ will implement the proposed rule 
change on August 2, 2010. The text of the proposed rule change is 
available at http://nasdaqomx.cchwallstreet.com/, at NASDAQ's principal 
office, 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, 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 to increase the fee it charges for Market-on-
Close and Limit-on-Close orders executed in its closing cross from 
$0.0007 per share executed to $0.0010 per share executed. NASDAQ will 
continue to charge no fee for other quotes and orders executed in the 
closing cross.
    Since NASDAQ last modified the fee in July 2009, NASDAQ has made 
significant enhancements to the crossing network operating technology 
that have resulted in increased performance in the speed of closing 
crosses executed at NASDAQ, thereby providing market participants with 
more immediate information about the results of the closing cross. 
NASDAQ believes this fee change is fair in that it will be incurred by 
the market participants that benefit from the enhancements.
    Market participants entering Market-on-Close and Limit-on-Close 
orders seek a high probability of executing their orders at the closing 
price. Other closing cross orders, however, can be entered in response 
to the order imbalance indicator disseminated prior to the closing 
cross. The order imbalance indicator provides market participants with 
information about the number of shares that could not be matched in the 
closing cross if it occurred at the time of the indicator's 
dissemination. This information encourages market participants to enter 
additional orders to eliminate the imbalance, thereby ensuring the 
execution of more Limit-on-Close and Market-on-Close orders. 
Accordingly, NASDAQ does not believe that it is appropriate to charge 
for these orders, since they support the operation of an efficient 
close process that promotes liquidity and order interaction.
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act, \3\ in general, and with 
Section 6(b)(4) of the Act, \4\ 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 is increasing its 
closing cross fee for Market-on-Close and Limit-on-Close orders due to 
technology enhancements to the NASDAQ crossing network that have 
resulted in increased performance in the closing crosses executed at 
NASDAQ. NASDAQ believes the increase is reasonable in comparison to the 
benefit in expedited closing crosses executed at NASDAQ, and also notes 
that the fee for executing orders in the closing cross remains much 
lower than the $0.003 per share fee for executing orders during regular 
market hours. NASDAQ also believes this fee is equitable, as the 
technology enhancement to the crossing network benefits the market 
participants that will incur the increase.
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    \3\ 15 U.S.C. 78f.
    \4\ 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 rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \5\ and paragraph (f)(2) of Rule 19b-4 
thereunder.\6\ 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.
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    \5\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \6\ 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, as amended, 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

[[Page 47054]]

Number SR-NASDAQ-2010-095 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-2010-095. 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 Web site 
viewing and printing 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 offices 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 available publicly.
    All submissions should refer to File Number SR-NASDAQ-2010-095, and 
should be submitted on or before August 25, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-19219 Filed 8-3-10; 8:45 am]
BILLING CODE 8010-01-P