[Federal Register Volume 75, Number 126 (Thursday, July 1, 2010)]
[Notices]
[Pages 38162-38163]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-15997]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62380; File No. SR-NASDAQ-2010-052]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order 
Approving Proposed Rule Change To Establish the Nasdaq Short Sale 
Volume and Monthly Short Sale Transaction Service and Related Fees

June 25, 2010.

I. Introduction

    On April 26, 2010, The NASDAQ Stock Market LLC (``Nasdaq'') filed 
with the Securities and Exchange Commission (``Commission''), pursuant 
to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') 
\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to establish 
the Nasdaq Short Sale Volume and Monthly Short Sale Transaction files 
(the ``Service''). The Service is comprised of aggregate reported share 
volume of executed short sale trades during regular market hours on a 
daily basis, as well as every short sale executed on the Nasdaq 
execution system and reported to a consolidated tape for Nasdaq, the 
New York Stock Exchange (``NYSE'') and regional exchange-listed 
securities, including the price of the trade and the number of shares 
for every short sale transaction, on a monthly basis, separated into 
daily files. On May 13, 2010, Nasdaq filed Amendment No. 1. The 
proposed rule change, as modified by Amendment No. 1, was published for 
comment in the Federal Register on May 25, 2010.\3\ The Commission 
received no comments on the proposal. This order approves the proposed 
rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 62112 (May 14, 
2010), 75 FR 29371.
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II. Description of the Proposal

    Nasdaq is proposing to establish a new service and related fees. 
The Service is comprised of aggregate reported share volume of executed 
short sale trades during regular market hours on a daily basis, as well 
as every short sale executed on the Nasdaq execution system and 
reported to a consolidated tape for Nasdaq, the NYSE and regional 
exchange-listed securities, including the price of the trade and the 
number of shares for every short sale transaction, on a monthly basis, 
separated into daily files. Nasdaq proposes to offer the Service at 
$500 per subscriber, per month, which would allow a distributor access 
to the downloadable FTP files and to distribute the product internally 
and externally.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
change, as modified by Amendment No. 1, is consistent with the Act and 
the rules and regulations thereunder applicable to a national 
securities exchange.\4\ In particular, the Commission finds that the 
proposed rule change is consistent with Section 6(b)(4) of the Act,\5\ 
which requires that the rules of a national securities exchange provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and issuers and other parties using its 
facilities, and Section 6(b)(5) of the Act,\6\ which requires, among 
other things, that the rules of an exchange not be designed to permit 
unfair discrimination between customers, issuers, brokers, or dealers. 
The Commission also finds that the proposed rule change is consistent 
with Section 6(b)(8) of the Act,\7\ in that it does not impose any 
burden on

[[Page 38163]]

competition that is not necessary or appropriate in furtherance of the 
purposes of the Act.\8\
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    \4\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(4).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ 15 U.S.C. 78f(b)(8).
    \8\ The proposal meets the criteria, formulated by the 
Commission in connection with the petition filed by NetCoalition, 
for approval of proposed rule changes concerning the distribution of 
non-core market data. See Securities Exchange Act Release Nos. 59039 
(December 2, 2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-
2006-21) and 55011 (December 27, 2006) (order granting petition for 
review of SR-NYSEArca-2006-021). In its order issued in connection 
with the NetCoalition petition, the Commission stated that 
``reliance on competitive forces is the most appropriate and 
effective means to assess whether the terms for the distribution of 
non-core data are equitable, fair and reasonable, and not 
unreasonably discriminatory.'' 73 FR at 74781-82. As such, the 
``existence of significant competition provides a substantial basis 
for finding that the terms of an exchange's fee proposal are 
equitable, fair, reasonable, and not unreasonably or unfairly 
discriminatory.'' Id. at 74782. If an exchange ``was subject to 
significant competitive forces in setting the terms of a proposal,'' 
a proposal will be approved unless the Commission determines that 
``there is a substantial countervailing basis to find that the terms 
nevertheless fail to meet an applicable requirement of the Exchange 
Act or the rules thereunder.'' Id. at 74781.
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    The Commission has reviewed the proposal using the approach set 
forth by the Commission for non-core market data fees, and finds that 
the proposal meets the criteria for approval. Because Nasdaq was 
subject to significant competitive forces in setting the terms of the 
proposal, the Commission will approve the proposal in the absence of a 
substantial countervailing basis to find that the terms of the proposal 
fail to meet the applicable requirements of the Act or the rules 
thereunder. An analysis of the proposal does not provide such a basis.
    Nasdaq has represented that the Service is a voluntary one, and 
that the information provided is not comprised of data that Nasdaq 
receives because of Nasdaq's status as a self-regulatory organization. 
Because the Service is voluntary, Nasdaq has met the statutory standard 
by pricing the Service according to free market principles; indeed, if 
Nasdaq priced the Service too high, those in the marketplace could 
simply opt not to purchase the Service. The Commission believes that 
Nasdaq's fees for the Service are reasonable and equitably allocated.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\9\, that the proposed rule change (SR-NASDAQ-2010-052), as modified by 
Amendment No. 1, be, and it hereby is, approved.
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    \9\ 15 U.S.C. 78s(b)(2).
    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-15997 Filed 6-30-10; 8:45 am]
BILLING CODE 8010-01-P