[Federal Register Volume 73, Number 140 (Monday, July 21, 2008)]
[Notices]
[Pages 42397-42399]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-16588]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58152; File No. SR-NASDAQ-2008-059]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Modify Fees for Members Using the NASDAQ Options Market

July 14, 2008.
    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 1, 2008, 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, II, 
and III below, which Items have been prepared substantially by Nasdaq. 
Pursuant to Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
\4\ thereunder, Nasdaq has designated this proposal as establishing or 
changing a due, fee, or other charge, which renders the proposed rule 
change effective upon filing. 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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to modify Rule 7050 governing pricing for Nasdaq 
members using the NASDAQ Options Market (``NOM''), Nasdaq's facility 
for executing and routing standardized equity and index options. Nasdaq 
will implement the proposed rule change on July 1, 2008.
    The text of the proposed rule change is below. Proposed new 
language is italicized; proposed deletions are in brackets.\5\
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    \5\ Changes are marked to the rule text that appears in the 
electronic Nasdaq Manual found at http://nasdaq.complinet.com.
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* * * * *

7050. NASDAQ Options Market

    The following charges shall apply to the use of the order execution 
and routing services of the NASDAQ Options Market by members for all 
securities.
    (1)-(3) No Change.
    (4) Fees for executions of contracts other than those executed on 
the

[[Page 42398]]

NASDAQ Options Market shall include execution and clearing fees charged 
to NASDAQ for executing on away markets, as follows:

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                                                                     Customer          Firm             MM
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                                                      AMEX
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                                                                           $0.06           $0.63           $0.66
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                                                       BOX
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Penny Pilot.....................................................            0.51            0.51            0.51
Non-Penny Pilot.................................................            0.06            0.26            0.26
BKX.............................................................            0.06            0.41            0.41
NDX.............................................................            0.06            0.42            0.42
MNX.............................................................            0.06            0.42            0.42
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                                                      CBOE
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Equity Options..................................................            0.06            0.51            0.51
QQQQ............................................................            0.06            0.31            0.31
SPY.............................................................            0.24            0.51            0.51
OEX, XEO........................................................            0.42            0.42            0.42
SPX >= $1.......................................................            0.56            0.52            0.52
SPX < $1........................................................            0.47            0.52            0.52
MVR.............................................................            0.46            0.31            0.31
Volatility Indices..............................................            0.52            0.57            0.57
DXL.............................................................            0.56            0.61            0.61
IWM.............................................................            0.24            0.31            0.31
DJX, MNX, NDX, & RUT............................................            0.34            0.61            0.61
Other indices, ETFs, & HOLDRs...................................            0.24            0.51            0.51
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                                                       ISE
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Equity Options..................................................            0.06            0.24     [0.46] 0.51
Premium Products **.............................................            0.24            0.24     [0.46] 0.51
BKX, FTZ, IJH, IJR, IJS, MFX, MID, MSH, SML, UKX................            0.24            0.34     [0.56] 0.61
RMN, RUI, RUT...................................................            0.24            0.39     [0.61] 0.66
NDX, MNX........................................................            0.24            0.40     [0.62] 0.67
FUM, HSX, POW, TNY, WMX.........................................            0.24            0.29     [0.51] 0.56
[FTZ]...........................................................          [0.06]          [0.34]          [0.56]
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** Premium products: BBH, BYT, DBA, DBO, DBS, DDM, DGL, DIA, DMA, DSI, DUG, DVY, DXD, EEM, EEV, EFA, ERF, EWA,
 EWC, EWG, EWH, EWJ, EWT, EWW, EWY, EWZ, FCG, FDG, FDM, FIW, FNI, FXA, FXB, FXC, FXE, FXF, FXI, FXP, FXY, GDX,
 GLD, HHH, HHO, HVY, IAI, IBB, IEF, IGW, ILF, IVE, IVV, IVW, IWB, IWD, IWF, IWM, IWN, IWO, IXX, IXZ, IYE, IYM,
 IYR, IYT, JLO, KBE, KCE, KIE, KLD, MDY, MOO, MYP, OEF, OIH, OOG, PBW, PGJ, PHO, PMP, PPH, PUF, QID, QLD, RND,
 RSP, RTH, RUF, SAW, SDS, SHY, SKF, SIN, SMH, SPY, SSO, TAN, TLT, TTH, TWM, UNG, USO, UTH, UWM, UYG, WSI, XHB,
 XLB, XLE, XLF, XLI, XLK, XLP, XLU, XLV, XLY, XME, XRT.
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                                                    NYSE-Arca
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Penny Pilot.....................................................            0.51            0.51            0.51
Non-Penny Pilot.................................................            0.06            0.56            0.56
BKX.............................................................            0.06            0.66            0.66
RUT.............................................................            0.06            0.71            0.71
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                                                      PHLX
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Equity Options..................................................            0.06            0.30            0.51
MNX & NDX Options...............................................            0.18            0.30            0.51
Index Options...................................................            0.50            0.30            0.26
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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
    Nasdaq is proposing to modify the fees assessed for execution of 
options orders entered into NOM but routed to away markets. On June 30, 
2008, Nasdaq filed SR-2008-058, a proposal to pass through to Exchange 
members the actual fees assessed by away markets plus the clearing fees 
for the execution of orders routed from Nasdaq. Nasdaq collected and 
organized in chart format the fees to be assessed for routing to each 
destination exchange.
    Nasdaq is filing this proposed rule change to reflect a change 
proposed by the International Securities Exchange on

[[Page 42399]]

June 30, 2008, in SR-ISE-2008-55.\6\ In addition, Nasdaq is adding to 
the list of products that ISE treats as ``premium'' options symbol FXY, 
which had been inadvertently omitted from Nasdaq's fee schedule. 
Finally, within Nasdaq's fee schedule for executions occurring at ISE, 
Nasdaq is proposing to classify options class FTZ as a premium product 
with a fee of $.24, $.34, and $.61 for customers, firms, and market 
makers. Options class FTZ had previously been listed in a category by 
itself with executions fees of $.06, $.34, and $.56 for customers, 
firms, and market makers. Nasdaq expects that ISE will charge Nasdaq 
members $.24, $.34, and $.61, respectively, as set forth in Nasdaq's 
proposed rule language.\7\ All fees for markets other than ISE remain 
unchanged.
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    \6\ See Securities Exchange Act Release No. 58091 (July 3, 
2008), 73 FR 39754 (July 10, 2008) (SR-ISE-2008-55).
    \7\ See e-mail from Jeffrey S. Davis, Vice President and Deputy 
General Counsel, Nasdaq, to Joseph P. Morra, Special Counsel, and 
Andrew Madar, Attorney-Advisor, Commission, dated July 10, 2008, 
adding the prior 3 sentences.
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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 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.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
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    Nasdaq is one of seven options markets in the national market 
system for standardized options. Joining Nasdaq and electing to trade 
options is entirely voluntary. Under these circumstances, Nasdaq's fees 
must be competitive and low in order for Nasdaq to attract order flow, 
execute orders, and grow as a market. The various exchanges have filed 
these fees with the Commission and it is reasonable for Nasdaq to pass 
those fees through to its members. As such, Nasdaq believes that its 
fees are fair and reasonable and consistent with the Exchange Act.

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. To the contrary, 
Nasdaq has designed its fees to compete effectively for the execution 
and routing of options contracts and to reduce the overall cost to 
investors of options trading.

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 \10\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\11\ because it establishes or changes a due, fee, or other 
charge imposed on members by Nasdaq. Accordingly, the proposal is 
effective upon filing with the Commission. At any time within 60 days 
of the filing of the 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.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 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 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-2008-059 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, Station Place, 100 F Street, NE., Washington, 
DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2008-059. 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 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-2008-059 and should 
be submitted on or before August 11, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-16588 Filed 7-18-08; 8:45 am]
BILLING CODE 8010-01-P