[Federal Register Volume 75, Number 237 (Friday, December 10, 2010)]
[Notices]
[Pages 77022-77024]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31099]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63441; File No. SR-NASDAQ-2010-152]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Fees for Direct Access to Exchange Data

December 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 November 24, 2010, The NASDAQ Stock Market LLC (``NASDAQ'' or the 
``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 by the self-regulatory 
organization. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASDAQ proposes an amendment to the fee schedule to assess ``direct 
access'' fees on certain customers receiving NASDAQ data within 
NASDAQ's co-location facility. The rule filing also deletes outdated 
dated verbiage in the fee schedule to eliminate confusion regarding 
application of the fees. NASDAQ will implement the proposed change on 
December 1, 2010. The text

[[Page 77023]]

of the proposed rule change is available at http://nasdaq.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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NASDAQ is amending its fee schedule to correct an anomaly that 
effectively exempts certain customers residing within NASDAQ's co-
location facility from paying a monthly fee for direct access to NASDAQ 
data, while customers that receive data from an extranet and reside 
outside the co-location facility are assessed the fee. The inequity is 
a result of the definition of ``direct access'' in the fee schedule, 
which does not by its terms clearly apply to data feeds provided to 
customers through distributors located within the co-located facility. 
This rule filing will expand the definition of ``direct access'' and 
thereby operate to assess the same fee on all firms that have access to 
NASDAQ's raw data feeds, whether co-located or not. It will also delete 
terms that are obsolete or generally limiting, given the evolution of 
technologies and systems through which data may be accessed.
    NASDAQ, like other data providers, assesses fees for its real time 
market data. In general, a customer that receives a data feed directly 
from the Exchange is assessed a ``direct access'' fee. If the customer 
then distributes the data, it is a ``distributor'' as defined under the 
fee schedule and pays an ``internal'' or ``external'' distributor fee, 
depending upon whether it distributes the data internally or 
externally. A ``distributor'' is broadly defined to include any entity 
that distributes NASDAQ's data, whether it receives the data feed 
directly from NASDAQ or indirectly through another entity. Distributor 
fees apply to distributors located within the Exchange's co-location 
facility as well as those outside of it.
    The definition of what constitutes ``direct access,'' however, is 
limited to specific types of communications connections, and does not 
currently include the systems by which data is delivered through 
distributors located within the co-location facility to their customers 
also located within the co-location facility. As a result, the 
distributor's customers in the co-location facility are not charged a 
direct access fee, even though they receive NASDAQ's data in its raw 
data format and have the same low latency data access as non-co-located 
extranet customers that pay the Direct Access fee.
    To correct this disparity, this rule filing will include within the 
definition of ``direct access'' the receipt of NASDAQ data within the 
co-location facility. It will also delete terms that, while describing 
various means by which data is currently accessed, do not clearly or 
adequately describe all viable technological means of accessing data. 
For example, reference to ``the MCI Financial Extranet'' is deleted 
because MCI has become ``Verizon,'' and Verizon no longer has special 
status among extranets as it did when the current rule was written. The 
terms ``Nasdaq-operated Web site, system or application'' are also 
deleted, as they are limiting terms that do not clearly encompass 
potential technological means of accessing NASDAQ data. Their 
elimination does not impact the fees of any customer currently assessed 
a Direct Access fee, but should preclude the need for future rule 
changes to the definition of direct access, as the means by which those 
same customers access data evolve over time.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\3\ in general, and with 
Sections 6(b)(5) of the Act,\4\ in particular. The proposal is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest. The filing permits 
transparent, uniform fees for direct access to Exchange data for all 
customers, whether co-located or not.
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    \3\ 15 U.S.C. 78f.
    \4\ 15 U.S.C. 78f(b)(5).
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    In addition, the Exchange believes that the proposed rule change is 
consistent with the provisions of Section 6 of the Act,\5\ in general, 
and with Section 6(b)(4) of the Act,\6\ 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 The Exchange operates or controls. In 
particular, the Exchange notes that the amendment corrects an anomaly 
that effectively exempts certain co-located customers receiving the 
data from paying a direct access fee.
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    \5\ 15 U.S.C. 78f.
    \6\ 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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\7\ At any time within 60 days of the filing 
of the proposed rule change, the Commission summarily may temporarily 
suspend 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. If the Commission takes such action, the Commission shall 
institute proceedings to determine whether the proposed rule should be 
approved or disapproved.
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    \7\ 15 U.S.C. 78s(b)(3)(a)(ii).
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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:

[[Page 77024]]

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-2010-152 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-2010-152. 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, 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 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-2010-152 and should be submitted on or before January 3, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31099 Filed 12-9-10; 8:45 am]
BILLING CODE 8011-01-P