[Federal Register Volume 77, Number 89 (Tuesday, May 8, 2012)]
[Notices]
[Pages 27105-27106]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-11002]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66905; File No. SR-NASDAQ-2012-056]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Rules 7001 and 7018(h)

May 2, 2012.
    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 April 30, 2012, The NASDAQ Stock Market LLC (``NASDAQ'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change as described in Items I and II 
below, which Items have been prepared by the Exchange. 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 amendments to Rules 7001 and 7018(h). NASDAQ will 
implement the proposed change on May 1, 2012. 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 self-regulatory organization 
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 those statements may be examined at 
the places specified in Item III [sic] below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts 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 proposing to eliminate its long-standing trade reporting 
fee found in Rule 7018(h) and institute an increase in its monthly 
trading rights fee under Rule 7001. NASDAQ's goal in making this change 
is to assess a more uniform fee for the post-trade processing that 
NASDAQ provides to members that trade on the NASDAQ Market Center. 
Currently, Rule 7018(h) assesses a fee of $0.029 per side per trade 
report if a member is party to an average daily volume of trade reports 
during the month of less than 15,000, but does not assess a fee for 
higher volumes of trade reports. NASDAQ is proposing instead to 
increase the monthly trading rights fee from $500 to $1,000 for all 
members.
    The fee under Rule 7018(h) was assessed for the provision of post-
trade processing by the Automated Confirmation Transaction system 
(``ACT'') and the BRACE systems. ACT and BRACE are NASDAQ's proprietary 
systems that facilitate post-execution price and volume reporting, 
reconciliation, and clearing of trades occurring on NASDAQ.\3\ 
Specifically, ACT matches and processes trade changes/corrections and 
sends transactions reports to the securities information processors 
that disseminate trade information to the public. BRACE sends trade 
information to National Securities Clearing Corporation (``NSCC'') for 
clearing. The systems also store data for downloading and review by 
member firms, clearing firms, and by FINRA for regulatory analysis. 
Data produced through NASDAQ's post-trade processes is stored, at 
considerable expense, for a period of at least five years. The increase 
in the trading rights fee is intended to ensure that all members defray 
a portion of the substantial fixed costs associated with post-trade 
processing.
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    \3\ ACT also supports the operation of the FINRA/NASDAQ Trade 
Reporting Service.
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 2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\4\ in general, and with 
Sections 6(b)(4) and 6(b)(5) of the Act,\5\ 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, and is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers. NASDAQ believes that the fee change is reasonable 
because it is designed to ensure that all members defray a portion of 
the substantial fixed costs associated with post-trade processing. 
Moreover, the size of the increase in the trading rights fee compares 
favorably with other monthly fees for fixed cost services provided by 
the Exchange, such as the fees for access services under Rule 7015. 
NASDAQ also notes that many of the members that have previously paid a 
fee under Rule 7018(h) will see a reduction in their monthly charges; 
NASDAQ further believes that it is reasonable for members that have not 
previously paid a fee for post-trade processing to be assessed a charge 
that reflects the benefits from these services. The fee change is 
consistent with an equitable allocation of fees because it will ensure 
that all members that receive benefits from the post-trade processing 
provided by NASDAQ pay a fee that contributes to the costs incurred in 
operating the systems that perform these functions.

[[Page 27106]]

Finally, the fee change is not unfairly discriminatory because it 
applies to all members.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(4) and (5).
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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, as amended. Because the market 
for exchange services is extremely competitive, members may readily opt 
to disfavor NASDAQ if they believe that alternatives offer them better 
value. For this reason and the reasons discussed in connection with the 
statutory basis for the proposed rule change, NASDAQ does not believe 
that the proposed changes will impair the ability of members or 
competing trading venues to maintain their competitive standing in the 
financial markets.

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.\6\ 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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    \6\ 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:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NASDAQ-2012-056 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-2012-056. This 
file number should be included on the subject line if email 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 
10:00 a.m. and 3:00 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-2012-056 and should 
be submitted on or before May 29, 2012.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-11002 Filed 5-7-12; 8:45 am]
BILLING CODE 8011-01-P