[Federal Register Volume 72, Number 51 (Friday, March 16, 2007)]
[Notices]
[Pages 12647-12648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-4811]



[[Page 12647]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55445; File No. SR-NASDAQ-2006-049]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Proposed Rule Change To Incorporate Full Depth of 
the Nasdaq Quoting of NYSE- and Amex-Listed Stocks into the TotalView 
Entitlement and Modify the User Fee Schedule for TotalView Data, and To 
Replace Nasdaq OpenView To Provide the Individual Nasdaq Market 
Participants' Best Bids and Offers in NYSE- and Amex-Listed Stocks

March 12, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on November 16, 2006, 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. 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

    Nasdaq proposes to incorporate full depth of the Nasdaq quoting of 
NYSE- and Amex-listed stocks into the TotalView entitlement and modify 
the user fee schedule for TotalView data. Nasdaq also proposes to 
replace Nasdaq OpenView to provide the individual Nasdaq Market 
Participants' best bids and offers in NYSE- and Amex-listed stocks.
    The text of the proposed rule change is available at Nasdaq, 
www.nasdaq.com, and the Commission's Public Reference Room.\3\
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    \3\ Changes are marked to the rule text that appears in the 
electronic manual of Nasdaq found at http://www.complinet.com/nasdaq.
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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. 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 currently has Commission approval to offer two data 
entitlements containing quote and order data--commonly known as ``depth 
of book'' data--for Nasdaq-listed stocks and for NYSE/Amex-listed 
stocks trading on Nasdaq systems. The Commission approved both fees in 
2002. First, Nasdaq received Commission approval to disseminate a 
``depth of book'' product for Nasdaq stocks called TotalView.\4\ 
TotalView originally contained data representing all quotes and orders 
in Nasdaq stocks trading on Nasdaq's SuperMontage system. The 
Commission approved an initial TotalView fee of $150 per user per 
month, and later approved Nasdaq's proposal to reduce the fee to $70 
per month for professional users and $14 per month for non-professional 
users.\5\
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    \4\ See Securities Exchange Act Release No. 46843 (November 18, 
2002), 67 FR 70471 (November 22, 2002) (SR-NASD-2002-33).
    \5\ See Securities Exchange Act Release No. 48581 (October 1, 
2003), 68 FR 57945 (October 7, 2003) (SR-NASD-2003-111).
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    Second, also in 2002, the Commission approved Nasdaq's proposal to 
disseminate a full depth of book product for NYSE/Amex stocks. That 
product, called ``OpenView,'' contained all quotes and orders for NYSE/
Amex-listed stocks in Nasdaq's execution system.\6\ The Commission-
approved fee for OpenView was $6 per user per month. Thus, market 
participants seeking to receive all Nasdaq market participant quote and 
order data for Nasdaq, NYSE, and Amex securities, paid two fees 
totaling $76 for professional users and $20 for non-professional users.
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    \6\ See Securities Exchange Act Release No. 46534 (September 23, 
2002), 67 FR 61368 (September 30, 2002) (SR-NASD-2002-86).
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    Nasdaq has augmented the TotalView product many times while holding 
the Commission-approved fees constant. In 2004 and 2005, Nasdaq added 
to TotalView all data from Nasdaq's opening and closing crosses. In 
March of 2005, Nasdaq added to the TotalView entitlement a separate 
data feed disseminating depth of book data in an unprocessed, order-by-
order format. Also in 2005, Nasdaq added a separate data feed 
containing depth of book data from its Brut Facility.\7\ By 2006, 
Nasdaq was disseminating via TotalView, depth of book data from the 
Nasdaq Market Center using multiple formats and multiple data feeds.
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    \7\ See Securities Exchange Act Release No. 51862 (June 16, 
2005), 70 FR 36426 (June 23, 2005) (SR-NASD-2005-039).
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    Nasdaq proposes to integrate the entitlement for full depth from 
Nasdaq market participants quoting in Nasdaq stocks with the full depth 
from Nasdaq market participants quoting in NYSE- and Amex-listed 
stocks, resulting in a single entitlement, to be called TotalView. This 
single entitlement would cost $75 per user per month for professional 
users and $14 per user per month for non-professional users, rather 
than the current total of $76 and $20 for TotalView and OpenView. In 
the case of non-professionals, there is no fee increase on account of 
this change, simply an increase in functionality. Users that previously 
subscribed to the TotalView and OpenView entitlements separately will 
receive a $1 per user per month fee decrease. Only those users that had 
one of the companion entitlements without the other would pay more 
under this proposal.
    Nasdaq is also proposing to distribute the best bid and offer from 
each Nasdaq market participant quoting in NYSE- and Amex-listed stocks 
in real time. As set forth in proposed Rule 7023(c), Nasdaq proposes a 
$5 per user per month price for this product. Nasdaq expects that most 
users currently receiving full depth from Nasdaq in NYSE- and Amex-
listed stocks will continue to do so via the TotalView entitlement. 
However, for any subscriber currently receiving only data for NYSE- and 
Amex-listed stocks (i.e., OpenView data), and not wishing to receive 
also data for Nasdaq-listed stocks, this option allows a user to 
continue paying at the same rate schedule for user-fees that they have 
in the past.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\8\ in general, and with Section 
6(b)(4) of the Act,\9\ in particular, in that the proposed unified fee 
for depth data for Nasdaq, NYSE and Amex stocks will result in a fee 
decrease of $1 from the current Commission-approved fees for that data. 
Nasdaq will continue to make NYSE and Amex best bid and offer data 
available separately at a reduced rate from the current fee for depth 
of book

[[Page 12648]]

data. Nasdaq believes that this proposed rule change will encourage the 
broader redistribution of the Nasdaq depth of book information, thus 
improving transparency and thereby benefiting the investing public.
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    \8\ 15 U.S.C. 78f.
    \9\ 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. As a general 
matter, the Commission has long held the view that ``competition and 
innovation are essential to the health of the securities markets. 
Indeed, competition is one of the hallmarks of the national market 
system.'' \10\ The Commission has also stated ``that the notion of 
competition is inextricably tied with the notion of economic 
efficiency, and the Act seeks to encourage market behavior that 
promotes such efficiency, lower costs, and better service in the 
interest of investors and the general public. \11\
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    \10\ Securities Exchange Act Release No. 43863 (January 19, 
2001), 66 FR 8020 (January 26, 2001) (SR-NASD-99-53).
    \11\ Securities Exchange Act Release No. 54155 (July 14, 2006), 
71 FR 41291, 41298 (July 20, 2006) (SR-NASDAQ-2006-001).
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    The Commission goes on to state its belief ``that the appropriate 
analysis to determine a proposal's competitive impact is to weigh the 
proposal's overall benefits and costs to competition based on the 
particular facts involved, such as examining whether the proposal would 
promote economically efficient execution of securities and fair 
competition between and among exchange markets and other market 
centers, as well as fair competition between the participants of a 
particular market.\12\
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    \12\ Id.
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    The proposed rule change is designed to increase transparency and 
the efficiency of executions by enabling vendors to provide additional 
market data in a cost efficient manner. There is significant 
competition for the provision of market data to broker-dealers and 
other market data consumers, as well as competition for the orders that 
generate the data. Nasdaq fully expects its competitors to quickly 
respond to this proposal as they have responded to other Nasdaq data 
products in the past.
    Moreover, market forces have shaped the market data fees that 
Nasdaq has charged for this product in the past and will continue to 
shape those fees in the future. As noted above, the Commission 
originally approved a fee of $150 for TotalView. Nasdaq lowered that 
fee to $70 and $14 in response to the lack of demand by vendors and 
users. Vendors simply will only utilize the service unless and until 
they conclude that it is economically beneficial to them and to their 
users.

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 [email protected]. Please include 
File No. SR-NASDAQ-2006-049 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NASDAQ-2006-049. 
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. 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-NASDAQ-2006-
049 and should be submitted on or before April 6, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-4811 Filed 3-15-07; 8:45 am]
BILLING CODE 8010-01-P