Document ID: SEC-2009-0981-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change To Modify Port Fees
Posted Date: 2009-07-16T04:00Z

[Federal Register: July 16, 2009 (Volume 74, Number 135)]
[Notices]               
[Page 34613-34615]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16jy09-90]                         

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60265; File No. SR-NASDAQ-2009-058]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Proposed Rule Change To Modify Port Fees

July 8, 2009.
    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 June 24, 2009, 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 by NASDAQ. The Commission is publishing this notice 
to solicit comments on the proposed rule from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASDAQ proposes to modify fees charged to members and non-members 
for ports used to enter orders into NASDAQ systems. The text of the 
proposed rule change is available from the principal office of NASDAQ 
and from the Commission, and is also available at http://
www.cchwallstreet.com/nasdaq. NASDAQ will implement the proposed rule 
change on the first day of the month immediately following Commission 
approval (or on the date of approval, if on the first business day of a 
month).

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.

[[Page 34614]]

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 monthly fee that it charges for 
ports used to enter orders in NASDAQ trading systems such as the NASDAQ 
Market Center and the NASDAQ Options Market. The change, which 
increases the charge from $400 to $500 per month, applies to ports 
using FIX, RASH, and OUCH. The change does not affect ports used to 
receive market data, to enter quotes, or to enter trade reports into 
the FINRA/NASDAQ Trade Reporting Facility. The change applies both to 
members that obtain ports for direct access, and non-member service 
bureaus that act as a conduit for orders entered by NASDAQ members that 
are their customers.
    NASDAQ has not made any significant changes to the fees that it 
charges for access to its market facilities since it began to operate 
as a national securities exchange in 2006. During that period, however, 
the market has undergone dramatic changes, including the implementation 
of Regulation NMS, the entry of several significant new trading venues, 
extreme market volatility resulting from the credit crisis in the late 
2008, and a marked increase in the percentage of orders being executed 
away from transparent public markets. Accordingly, NASDAQ believes that 
an increase in access services fees is now warranted to help ensure 
that its market technology continues to perform at a high level of 
responsiveness and efficiency.
    NASDAQ is also modifying the language of Rule 7015 to make it clear 
that access service fees apply to access provided to all NASDAQ-
operated systems, to replace references to NASD with references to 
FINRA, and remove obsolete language regarding a trial discount that 
ended in 2007. Finally, NASDAQ is removing language regarding the 
applicability of the rule to members and non-members. Because the 
current rule has been previously approved for applicability to members 
and non-members, and because this filing likewise applies to both 
members and non-members, the existing language is unnecessary and 
potentially confusing to the reader.
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\ as stated above [sic], in that it provides an 
equitable allocation of reasonable dues, fees, and other charges among 
its members and other persons using the [sic] its facilities. NASDAQ 
believes that its modified access services fees are reasonable in light 
of the benefits to members of direct market access, and are equitably 
allocated among members based upon the number of access ports that they 
require to submit orders to the market. NASDAQ believes that its fees 
for access services will enable it to cover its costs and earn an 
appropriate return on its investment in market technology and services.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f.
    \4\ 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. Fees for market 
access are a component of the overall fees charged by NASDAQ to execute 
and route orders through the NASDAQ Market Center. As the Commission 
has recognized, the market for execution and routing services is 
extremely competitive.\5\ Market participants that choose not to 
connect directly to NASDAQ can readily access liquidity available on 
NASDAQ by directing their order flow to other venues that, under 
Regulation NMS, must route to NASDAQ if it has posted the best price. 
Accordingly, NASDAQ must set its fees, including access services fees, 
at a level that will not deter market participants from connecting to 
NASDAQ: Otherwise, potential users of NASDAQ's services will simply 
direct order flow to NASDAQ's multiple competitors.
---------------------------------------------------------------------------

    \5\ Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-2006-21).
---------------------------------------------------------------------------

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be 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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2009-058 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-2009-058. 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, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of the 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-2009-058 and

[[Page 34615]]

should be submitted on or before August 6, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-16856 Filed 7-15-09; 8:45 am]

BILLING CODE 8010-01-P