[Federal Register Volume 72, Number 54 (Wednesday, March 21, 2007)]
[Notices]
[Pages 13328-13330]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-5088]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55457; File No. SR-NASDAQ-2006-064]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Proposed Rule Change and Amendments No. 1 and 2 
Thereto To Modify the Fee for Connecting to a Nasdaq Data Center Over 
the Internet

March 13, 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 December 22, 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 substantially prepared by Nasdaq. On January 19, 2007, 
Nasdaq submitted Amendment No. 1 to the proposed rule change. On 
February 22, 2007, Nasdaq submitted Amendment No. 2 to the proposed 
rule change.\3\ The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 2 replaced and superseded the original filing 
and Amendment No. 1 in their entirety.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to amend Rule 7034 to modify the fee for connecting 
to a Nasdaq data center over the Internet. The text of the proposed 
rule change is

[[Page 13329]]

available at Nasdaq, the Commission's Public Reference Room, and http://www.nasdaq.com.

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 had 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
    The purpose of this filing is to change the fee that Nasdaq charges 
for an Internet port used in the delivery of market data (Internet 
ports are currently available to connect to Nasdaq systems via the INET 
protocols) and to make certain conforming and clerical changes in the 
text of Nasdaq Rule 7034, which sets out charges for Nasdaq 
connectivity via the INET protocols.
    Following the recently completed consolidation of Nasdaq's three 
order books and corresponding matching engines--INET, Brut, and 
SuperMontage--into a single book (``SingleBook'') within the Nasdaq 
Market Center (``NMC''), Nasdaq users have retained the ability to 
connect with the NMC using the legacy access protocols of all three 
systems. Access to the NMC via secure Internet connectivity is one of 
several options available to INET protocol users both for entering 
orders and for receiving market data. (The number of customers 
currently using an Internet port to receive market data is relatively 
small. Legacy SuperMontage and Brut protocols do not currently include 
Internet access.) Other NMC connectivity options include extranet 
connectivity, where a user contracts directly with a third-party 
extranet provider, and private line connectivity, where a user leases a 
circuit directly from a third-party provider.
    Today, Nasdaq charges INET protocol users an additional $200 (in 
addition to the established charges for port pairs) for each port used 
to connect to a Nasdaq data center over the Internet because making 
such ports available requires Nasdaq to procure and maintain 
appropriate telecommunications circuits connecting its data centers to 
the points-of-presence of an Internet service provider. By contrast, in 
the case of extranet and private circuit connections, Nasdaq is not 
responsible for the outside telecommunications circuits.
    Since the introduction of Nasdaq's SingleBook, the volume of market 
data being delivered from Nasdaq to subscribers has increased from a 
peak of approximately 5Mbs at the end of October of 2006 to a peak of 
approximately 25Mbs as of the date of this filing. Consequently, in 
order to continue to adequately support Internet market data 
connections, Nasdaq expanded its available Internet bandwidth. In light 
of the expanded Internet bandwidth requirements, Nasdaq proposes to 
increase its Internet port fee from $200 to $600 per Internet port that 
is used to deliver market data. The additional Internet port fee with 
respect to Internet ports used for order entry will remain unchanged at 
the current $200 level.
    The proposed rule change also eliminates from the rule text 
references to the locations of data centers (because the relevant fees 
will not vary based on data center location) and it eliminates the 
reference to and pricing for Instinet Portal (a product now available 
from INET's former owner, Instinet, which INET was supporting on a 
transitional basis). Finally, the proposed rule change makes a clerical 
correction to the currently incomplete reference to SR-NASDAQ-2006-024 
in the existing rule text.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\4\ in general, and with 
Sections 6(b)(4) of the Act,\5\ in particular, in that the proposal 
provides for the equitable allocation of reasonable dues, fees, and 
other charges among its members and issuers and other persons using any 
facility or system which Nasdaq operates or controls.
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    \4\ 15 U.S.C. 78f.
    \5\ 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.

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 Nasdaq 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 Number SR-NASDAQ-2006-064 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-2006-064. 
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

[[Page 13330]]

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 publicly available. All submissions should refer to 
File Number SR-NASDAQ-2006-064 and should be submitted on or before 
April 11, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-5088 Filed 3-20-07; 8:45 am]
BILLING CODE 8010-01-P