[Federal Register Volume 75, Number 70 (Tuesday, April 13, 2010)]
[Notices]
[Pages 18932-18934]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-8365]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61854; File No. SR-NASDAQ-2010-044]


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

April 6, 2010.
    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, 2010, 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. 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 C.F.R. 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    NASDAQ proposes to modify pricing for NASDAQ members using the 
NASDAQ Market Center. NASDAQ will implement the proposed change on 
April 1, 2010. 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.

[[Page 18933]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NASDAQ is making modifications to its pricing schedule for 
execution of orders in securities priced at $1 or more through the 
NASDAQ Market Center.\5\ First, NASDAQ is eliminating volume-based 
pricing tiers that currently apply to executions of orders in the 
NASDAQ Market Center for securities listed on NASDAQ or the New York 
Stock Exchange (``NYSE''). As a result of this change, the fee to 
access liquidity in the NASDAQ Market Center will be $0.0030 per share 
executed, regardless of whether the security being traded is listed on 
NASDAQ, NYSE, NYSE Amex, or any other listing venue. The change is 
designed to ensure that NASDAQ does not lose money on trade executions, 
as is currently the case when the order of a member in the most 
favorable ``take'' tier (fee of $0.0028 per share executed for members 
with an average daily volume of more than 145 million share of 
liquidity routed, removed, and/or provided, and more than 35 million 
shares of liquidity provided) is matched with the order of a member in 
the two most favorable liquidity provider rebate tiers (credit of 
$0.00295 per share executed for members providing an average of more 
than 95 million share of liquidity per day, or $0.0029 per share 
executed for members providing an average of more than 35 million share 
of liquidity per day).
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    \5\ Fees and credits for executions of orders for securities 
priced below $1 remain unchanged.
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    Second, NASDAQ is increasing the liquidity provider rebate for 
securities listed on exchanges other than NASDAQ and NYSE. Currently, 
with respect to displayed quotes/orders, NASDAQ pays a liquidity 
provider rebate of $0.0025 per share executed to members providing an 
average of between 20,000,001 and 35 million shares of liquidity per 
day, and a rebate of $0.0020 per share executed to members providing 20 
million or fewer shares of liquidity per day. As a result of the 
change, NASDAQ will provide a rebate of $0.0026 per share executed to 
members providing 35 million or fewer shares of liquidity per day. 
Rebates to members that provide more than 35 million shares of 
liquidity per day remain unchanged.
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\6\ in general, and with Section 
6(b)(4) of the Act,\7\ 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. The impact of the price changes upon 
the net fees paid by a particular market participant will depend upon a 
number of variables, including the relative availability of liquidity 
on NASDAQ and other venues, the prices of the market participant's 
quotes and orders relative to the national best bid and offer (i.e., 
its propensity to add or remove liquidity), the types of securities 
that it trades, and the member's trading volumes. NASDAQ notes that the 
proposed elimination of ``take'' tiers will result in a fee schedule 
with less variability and will eliminate circumstances in which NASDAQ 
loses money on order executions by paying a rebate that is higher than 
the take fee it charges. The increase in the rebate for securities 
listed on exchanges other than NASDAQ and NYSE is intended to increase 
the attractiveness of NASDAQ as a venue for trading these securities.
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4).
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    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. 
Accordingly, if particular market participants object to the proposed 
fee changes, they can avoid paying the fees by directing orders to 
other venues. NASDAQ believes that its fees continue to be reasonable 
and equitably allocated to members on the basis of whether they opt to 
direct orders to NASDAQ.

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. Because the market 
for order execution and routing is extremely competitive, members may 
readily direct orders to NASDAQ's competitors if they object to the 
proposed rule change.

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 \8\ and subparagraph (f)(2) of Rule 19b-4 
thereunder.\9\ 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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    \8\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \9\ 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-2010-044 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-2010-044. 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 Web site 
viewing and printing in the Commission's Public Reference Room on 
official business days between the hours of 10 a.m. and

[[Page 18934]]

3 p.m. Copies of such filing also will be available for inspection and 
copying at the principal offices of the Exchange. 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-2010-044, and should be submitted 
on or before May 4, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-8365 Filed 4-12-10; 8:45 am]
BILLING CODE 8011-01-P