[Federal Register Volume 72, Number 74 (Wednesday, April 18, 2007)]
[Notices]
[Pages 19562-19564]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-7317]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55608; File No. SR-NASDAQ-2007-032]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Lower Fees for Distributors of Certain Market Data From the Nasdaq 
Market Center

 April 10, 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 March 30, 2007, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been substantially prepared by Nasdaq. The 
Exchange has filed the proposal as a ``non-controversial'' rule change 
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) 
thereunder,\4\ which renders it effective upon filing with the 
Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq is proposing to modify Nasdaq Rule 7019(b) to lower the

[[Page 19563]]

distributor fees that are applicable to distributors of Nasdaq 
TotalView and OpenView data, Nasdaq's full depth of book data feeds for 
Nasdaq securities and for NYSE and Amex securities.\5\ The text of the 
proposed rule change is available at Nasdaq, the Commission's Public 
Reference Room, and www.nasdaq.com.
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    \5\ The proposed rule change does not alter the Monthly Internal 
Distributor Fee and the Monthly External Distributor Fee for 
TotalView.
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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 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
    On February 12, 2007, Nasdaq completed the implementation of the 
new Nasdaq Market Center Execution System, commonly known as ``Single 
Book.'' The Single Book is the product of the integration of Nasdaq's 
three separate execution platforms into a single platform trading all 
Nasdaq, NYSE, and Amex securities.
    A by-product of this integration and the new system is a re-
alignment of Nasdaq's data feeds. Under the previous systems, market 
data for Nasdaq securities was disseminated on one set of data feeds 
and market data for NYSE and Amex securities was disseminated on 
another. Because the Single Book processes Nasdaq, NYSE, and Amex 
securities on a single platform, the market data for all securities is 
disseminated on a single, unified set of data feeds. For example, full 
depth of book data for Nasdaq securities was previously disseminated 
via one feed and full depth data for NYSE and Amex securities was 
disseminated via another. Starting February 12, 2007, market 
participants' best bids and offers for all securities are disseminated 
together via various unified data feeds. Full depth of book data for 
Nasdaq securities and for NYSE and Amex securities are now also 
disseminated via a unified full depth of book feed, made available in 
various formats.
    In November 2006, Nasdaq filed SR-NASDAQ-2006-048,\6\ a proposed 
rule change to lower the distributor fees applicable to the full depth 
feed emanating from the Single Book which has not yet been approved. 
Therefore, Nasdaq continues to assess its previously-approved fees to 
its current data feeds. This situation results in economic continuity 
in that market data recipients will continue to pay the same amount if 
they continue to receive the same market data elements. Thus, for 
example, a professional user that receives full depth of book for both 
Nasdaq and NYSE/Amex stocks in the past paid $70 for the Nasdaq data 
and $6 for the NYSE/Amex data, and will continue to pay that amount in 
the future.
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    \6\ See Securities Exchange Act Release No. 55443 (March 12, 
2007), 72 FR 13325 (March 21, 2007).
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    Nasdaq continues to assess the currently approved distributor fees 
for both TotalView and OpenView to recipients of the Single Book depth 
of book feeds. Currently, pursuant to Rule 7019(b), TotalView and 
OpenView are each subject to separate monthly distributor fees of 
$2,500 per month plus either $1,000 per month for internal distributors 
or $2,500 per month for external distributors. In other words, an 
external distributor of both TotalView and OpenView would pay $10,000 
per month.
    Prior to the Single Book, each distributor chose whether it would 
distribute TotalView, OpenView, or both. Beginning February 12, 2007, 
the full depth data feeds contained all of the data previously 
disseminated separately via both TotalView and OpenView. This motivated 
Nasdaq to propose in SR-NASDAQ-2006-48 a unified fee schedule with a 
lower distributor fee for TotalView. In the absence of approval of that 
proposal, beginning April 1, 2007, the first fee-liable billing cycle 
following the full launch of the Single Book, this will result in 
higher distributor fees for many vendors because the TotalView and 
OpenView data elements are included in the unified full depth data 
feeds, and each set of data continues to be liable for its own separate 
distributor fee.
    In order to avoid this impact, Nasdaq is proposing to lower the 
current fees until such time as SR-NASDAQ-2006-048 is decided. Due to 
the variables affecting the level of distributor fees paid by each 
vendor--whether it distributes TotalView, OpenView, or both and whether 
it distributes the data internally, externally, or both--it is 
impossible to replicate exactly the fee schedule proposed for the 
unified feed. Nasdaq has, however, spent significant time and energy 
assessing the vendor population and has attempted to lower the fees so 
as to minimize the aggregate impact on the overall vendor community.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\7\ in general, and with Section 
6(b)(4) of the Act,\8\ in particular, in that lowering the distribution 
fees for Nasdaq full depth of book feeds for Nasdaq and NYSE and Amex 
securities will encourage broader dissemination of that data and 
thereby increase transparency in those securities.
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    \7\ 15 U.S.C. 78f.
    \8\ 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

    Because the foregoing rule change does not: (1) Significantly 
affect the protection of investors or the public interest; (2) impose 
any significant burden on competition; and (3) become operative for 30 
days after the date of this filing, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing.\11\ 
However, Rule 19b-

[[Page 19564]]

4(f)(6)(iii) \12\ permits the Commission to designate a shorter time if 
such action is consistent with the protection of investors and the 
public interest. The Exchange has requested that the Commission waive 
the 30-day operative delay. The Commission believes that waiving the 
30-day operative delay is consistent with the protection of investors 
and the public interest because such waiver would permit Nasdaq to 
implement the proposed rule change on April 1, 2007, enabling many 
vendors to avoid paying higher distributor fees. For this reason, the 
Commission designates the proposed rule change to be operative upon 
filing with the Commission.\13\
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    \11\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to 
the Commission written notice of its intent to file the proposed 
rule change, along with a brief description and text of the proposed 
rule change, at least five business days prior to the date of filing 
of the proposed rule change, or such shorter time as designated by 
the Commission. The Exchange has requested that the Commission waive 
the 5-day pre-filing notice requirement. The Commission has 
determined to grant this request.
    \12\ Id.
    \13\ For the purposes only of waiving the 30-day operative 
delay, the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such 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.

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-2007-032 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NASDAQ-2007-032. 
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 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-2007-032 and should be submitted on or before May 
9, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-7317 Filed 4-17-07; 8:45 am]
BILLING CODE 8010-01-P