[Federal Register Volume 74, Number 140 (Thursday, July 23, 2009)]
[Notices]
[Pages 36543-36545]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-17530]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60323; File No. SR-NASDAQ-2009-067]


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

July 16, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\

[[Page 36544]]

notice is hereby given that on July 1, 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. Pursuant to 
Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ NASDAQ has designated this proposal as establishing or 
changing a due, fee, or other charge, which renders the proposed rule 
change effective upon filing.
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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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    The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.

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

    NASDAQ proposes to modify pricing for NASDAQ members using the 
Nasdaq Market Center. NASDAQ will implement this rule change on July 1, 
2009. The text of the proposed rule change is available at http://nasdaqomx.cchwallstreet.com/, at NASDAQ's principal office, and at the 
Commission's Public Reference Room.

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 several changes to its transaction services 
pricing. First, NASDAQ is proposing to lower the per-share fee for 
executions in the NASDAQ Market Center in securities listed on NASDAQ 
or on the New York Stock Exchange. Specifically, NASDAQ is establishing 
a new pricing tier for members that are most active in the NASDAQ 
Market Center. Currently, NASDAQ's highest activity tier offers a 
rebate of $0.00295 for members that add an average daily volume of 125 
million shares of liquidity to the NASDAQ Market Center, but NASDAQ 
charges $0.0030 per share for accessing liquidity.\5\ Effective July 1, 
2009, NASDAQ will establish a tier that requires members to meet two 
criteria: (1) Add, route, and/or remove an average daily volume of more 
than 150 million shares of liquidity through the NASDAQ Market Center 
and (2) add an average daily volume of more than 35 million shares of 
liquidity to the NASDAQ Market Center. Members meeting these criteria 
will be charged a ``take'' rate of $0.0027 per share executed in the 
NASDAQ Market Center.\6\ The proposed rule change is designed to 
attract additional activity to the NASDAQ Market Center and to return 
to members the efficiencies that are gained when members increase their 
level of activity at NASDAQ markets. Ultimately, those efficiencies are 
returned to investors in the form of lower overall trading costs.
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    \5\ The fees and rebates described in this filing apply to 
securities priced at $1 or more per share. Fees and rebates 
applicable to lower-priced securities remain unchanged.
    \6\ Firms that add average daily volume of 125 million shares 
currently receive a rebate of $0.00295 per share, the highest rebate 
available to NASDAQ members. Members meeting that criteria will 
continue to receive that rebate regardless of whether they also 
qualify for the new ``take'' rate tier.
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    Second, NASDAQ is proposing to increase the fee it charges for 
Market-on-Close and Limit-on-Close orders executed in its closing 
cross, from $0.0005 per share executed to $0.0007 per share executed. 
NASDAQ will continue to charge no fee for other quotes and orders 
executed in the closing cross. NASDAQ has not modified this fee since 
it first began to operate as a national securities exchange in 2006, 
and believes that an increase is now warranted to provide for 
additional revenue to mitigate the impact of the significant reduction 
to fees to access liquidity otherwise provided by this filing. The fee 
remains far lower than the fees charged to access liquidity during 
regular market hours, which are themselves subject to reduction under 
this proposal.
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 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. NASDAQ is significantly reducing the 
charge to access liquidity for market participants that both access and 
provide significant quantities of liquidity. This aspect of the 
proposal is aimed at recognizing the value to the market of its most 
active participants, and is similar to volume-based discounts that have 
long been in effect at NASDAQ and other trading venues. NASDAQ is also 
increasing its fee for Market-on-Close and Limit-on-Close orders to 
allocate a greater proportion of overall fees to members that benefit 
from using these valuable and popular order types. The overall impact 
of this fee increase is modest in comparison with the corresponding 
reductions.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).
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    The impact of the changes upon the net fees paid by a particular 
market participant will depend upon a number of variables, including 
its monthly volume, the order types it uses, and the prices of its 
quotes and orders (i.e., its propensity to add or remove liquidity and 
to set the best bid and offer). NASDAQ notes that it operates in a 
highly competitive market in which market participants can readily 
direct order flow to competing venues if they deem fee levels at a 
particular venue to be excessive. NASDAQ is reducing fees for many of 
its market participants to remain competitive with those charged by 
other venues and therefore strongly believes that its fees are 
reasonable and equitably allocated to those members that opt to direct 
orders to NASDAQ rather than competing venues.

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.

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 \9\ and subparagraph (f)(2) of Rule 19b-4 
thereunder.\10\ At any time within 60

[[Page 36545]]

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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    \9\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \10\ 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-2009-067 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-2009-067. 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 available publicly. All 
submissions should refer to File Number SR-NASDAQ-2009-067 and should 
be submitted on or before August 13, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-17530 Filed 7-22-09; 8:45 am]
BILLING CODE 8010-01-P