[Federal Register Volume 76, Number 175 (Friday, September 9, 2011)]
[Notices]
[Pages 55988-55989]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-23113]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65252; File No. SR-NASDAQ-2011-119]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Regarding a Clarifying Amendment To Direct Connectivity Services

September 2, 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 August 31, 2011, The NASDAQ Stock Market LLC (the ``Exchange'' 
or ``NASDAQ'') filed with the Securities and Exchange 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

    The Exchange proposes a clarifying amendment to Exchange Rule 7051 
regarding the Exchange's direct connectivity services. The text of the 
proposed rule change is available at http://nasdaq.cchwallstreet.com/, 
at the Exchange'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
    The purpose of this rule filing is to amend Rule 7051 entitled 
``Direct Connectivity to Nasdaq'' to clarify the Exchange's direct 
connectivity services. Currently, the Exchange assesses fees for direct 
10Gb circuit connections, and fees for direct circuit connections 
capable of supporting up to 1Gb, for customers who are not co-located 
at the Exchange's datacenter.\3\ The Exchange noted in SR-NASDAQ-2010-
077 that it makes available to both co-located and non-co-located 
customers direct connections capable of supporting up to 1Gb, with per 
connection monthly fees of $500 for co-located customers and $1000 for 
non co-located customers.\4\ Monthly fees are higher for non co-located 
customers because direct connection requires the Exchange to provide 
cabinet space and middleware for those customers' third-party vendors 
to connect to the datacenter and, ultimately, to the trading system.\5\ 
The Exchange also assesses an optional installation fee of $925 if the 
customer chooses to use an on-site router (collectively ``Direct 
Connectivity Fees'').\6\ The Exchange provides direct connect services 
and assesses fees through NASDAQ Technology Services, LLC, as it does 
with similar co-location services.\7\
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    \3\ See Securities Exchange Act Release No. 62663 (August 9, 
2010), 75 FR 49543 (August 13, 2010) (SR-NASDAQ-2010-077).
    \4\ Id. at page 5 and page 8.
    \5\ Id.
    \6\ Id.
    \7\ See Exchange Rule 7034(b), Connectivity to Nasdaq.
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    Subsequently, the Exchange amended these Direct Connectivity Fees 
to establish pricing for customers who are not co-located in the 
Exchange's data center, but require shared cabinet space and power for 
optional routers, switches, or modems to support their direct circuit 
connections. The Exchange assesses customers who are not co-located in 
the Exchange's data center monthly fees for space based on a height 
unit of approximately two inches high, commonly call a ``U'' space and 
a maximum power of 125 Watts per U space.\8\
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    \8\ See Securities Exchange Act Release No. 64440 (May 9, 2011), 
76 FR 28262 (May 16, 2011) (SR-NASDAQ-2011-061).
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    The Exchange now seeks to add clarifying text to Exchange Rule 7051 
to state that the direct connectivity services are provided by NASDAQ 
Technology Services, LLC. The Exchange's proposal is the result of its 
desire to prominently place language in the Exchange Rule 7051 to make 
transparent that the connectivity services are provided by NASDAQ 
Technology Services, LLC. Such change will assist with easy 
identification of items not serviced, and billed, by the Exchange. This 
change merely codifies the practice of the Exchange.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\9\ in general, and 
furthers the objectives of Section 6(b)(5) of the Act \10\ in 
particular, in that it is designed to promote just and equitable 
principles of trade, 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 Exchange believes the 
proposed amendment to Exchange Rule 7051 makes transparent that the 
direct connectivity services are provided by NASDAQ Technology 
Services, LLC. The Exchange believes that this clarifying amendment 
will benefit all market participants by making transparent the source 
of the direct connectivity services.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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)(i) of the Act.\11\ 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

[[Page 55989]]

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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    \11\ 15 U.S.C. 78s(b)(3)(a)(i).
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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-2011-119 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-2011-119. 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 website 
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-2011-119 and should be submitted on or before September 30, 
2011.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-23113 Filed 9-8-11; 8:45 am]
BILLING CODE 8011-01-P