[Federal Register Volume 76, Number 43 (Friday, March 4, 2011)]
[Notices]
[Pages 12178-12180]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-4900]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63983; File No. SR-NASDAQ-2011-032]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Offer Market Data to the Public at No Charge

February 25, 2011.
    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 February 24, 2011, The NASDAQ Stock Market LLC (the 
``Exchange'' or ``NASDAQ'') filed with the Securities and Exchange

[[Page 12179]]

Commission (the ``Commission'') the proposed rule change as described 
in Items I, II, and III below, which Items have been prepared by 
NASDAQ. 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 is filing this proposed rule change to identify in NASDAQ 
Options Market (``NOM'') rules the proprietary data feeds of NOM market 
information that NASDAQ makes available at no charge. The text 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, the Exchange 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. The Exchange 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
    Chapter VI, Section 1(a)(3) of the NOM Rules currently states that 
the NOM trading system includes ``a data feed(s) that can be used to 
display without attribution to Participants' MPIDs Displayed Orders on 
both the bid and offer side of the market for price levels then within 
the Nasdaq Options Market using the minimum price variation applicable 
to that security.'' NASDAQ is proposing to modify Section 1(a)(3) to 
specify the names and content of the four data feeds that NASDAQ makes 
available without charge containing market information related to 
trading on NOM.
    First, NASDAQ ITCH to Trade Options or ``ITTO'' is a data feed that 
provides quotation information for individual orders on the NOM book, 
last sale information for trades executed on NOM, and Order Imbalance 
Information as set forth in NOM Rules Chapter VI, Section 8. ITTO is 
the options equivalent of the NASDAQ TotalView/ITCH data feed that 
NASDAQ offers under NASDAQ Rule 7023 with respect to equities traded on 
NASDAQ. As with TotalView, members use ITTO to ``build'' their view of 
the NOM book by adding individual orders that appear on the feed, and 
subtracting individual orders that are executed. The Order Imbalance 
Information disseminated via ITTO is described in more detail below.
    Best of NASDAQ Options or ``BONO'' is a data feed that provides the 
NOM Best Bid and Offer and last sale information for trades executed on 
NOM. The NOM Best Bid and Offer and last sale information are identical 
to the information that NOM sends the Options Price Regulatory [sic] 
Authority (``OPRA'') and which OPRA disseminates via the consolidated 
data feed for options. BONO is the options equivalent of the NASDAQ 
Basic data feed offered for equities under NASDAQ Rule 7047.
    NASDAQ Options Depth at Price or ``DAP'' is a data feed that 
provides aggregate quotation information for each price level of 
trading interest on the NOM book, last sale data for trades executed on 
NOM, and Order Imbalance Information as set forth in NOM Rules Chapter 
VI, Section 8. The summary of interest at each price level is useful to 
members that seek to add or remove liquidity at various depths of the 
NOM book but that do not build a book in the manner described above 
with respect to ITTO.
    Finally, NASDAQ Options Net Order Imbalance or ``NOIView'' is a 
data feed that provides Order Imbalance Information as set forth in NOM 
Rules Chapter VI, Section 8. Members use NOIView to participate 
effectively in the NOM Opening Cross. It includes the following 
information: (1) A Current Reference Price'' [sic] which describes the 
trading interest on the NOM book at a given moment; (2) the number of 
contracts of eligible trading interest that are paired at the Current 
Reference Price; (3) the size of any order imbalance; (4) the buy/sell 
direction of any Imbalance; and (5) indicative prices at which the 
Nasdaq Opening Cross would occur if the Nasdaq Opening Cross were to 
occur at that time. NOIView is available in conjunction with the ITTO 
and DAP feeds described above.
2. Statutory Basis
    Nasdaq 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 in that it 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.
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    \3\ 15 U.S.C. 78f.
    \4\ 15 U.S.C. 78f(b)(5).
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    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations and broker-dealers increased authority and flexibility to 
offer new and unique market data to the public. It was believed that 
this authority would expand the amount of data available to consumers, 
and also spur innovation and competition for the provision of market 
data. Nasdaq believes that this proposal is in keeping with those 
principles by promoting increased transparency through the 
dissemination of more useful proprietary data and also by clarifying 
its availability to market participants.
    Additionally, NASDAQ is making a voluntary decision to make this 
data available. NASDAQ is not required by the Exchange Act in the first 
instance to make the data available, unlike the best bid and offer 
which must be made available under the Act. NASDAQ chooses to make the 
data available as proposed in order to improve market quality, to 
attract order flow, and to increase transparency. Once this filing 
becomes effective, NASDAQ will be required to continue making the data 
available until such time as NASDAQ changes its rule.

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, 
offering voluntary and free data feeds promotes competition among 
trading platforms by advertising available trading interest and 
enabling NOM to attract additional liquidity.

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.

[[Page 12180]]

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The proposed rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) of the Act \5\ and paragraph (f)(6) of Rule 19b-4 
thereunder,\6\ in that the proposed rule change: (i) Does not 
significantly affect the protection of investors or the public 
interest; (ii) does not impose any significant burden on competition; 
and (iii) does not become operative for 30 days after the date of the 
filing, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest; 
provided the self-regulatory organization has given the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(6).
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    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 change should be approved or 
disapproved.

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-2011-032 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-2011-032. 
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 the 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-2011-032 and should be submitted on or before March 25, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-4900 Filed 3-3-11; 8:45 am]
BILLING CODE 8011-01-P