[Federal Register Volume 78, Number 49 (Wednesday, March 13, 2013)]
[Notices]
[Pages 15988-15990]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-05734]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69055; File No. SR-NASDAQ-2013-038]


Self-Regulatory Organizations; the NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify the Fee Schedule Governing Order Routing

March 7, 2013.
    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 26, 2013, 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 is proposing [sic] proposed changes to amend NASDAQ's fee 
schedule governing order routing. NASDAQ will implement the proposed 
change on February 27, 2013.

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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NASDAQ is amending its fee schedule governing order routing to 
establish fees for routing orders using its two new order routing 
strategies, QDRK and QCST.\3\ All of the changes pertain

[[Page 15989]]

to securities priced at $1 or more per share, and to securities listed 
on NASDAQ, the New York Stock Exchange (``NYSE'') and exchanges other 
than NASDAQ and NYSE. In addition, QDARK [sic] and QCST orders, like 
other routable orders, will not count toward determining a member's 
shares of liquidity routed for purposes of NASDAQ fees.
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    \3\ QDRK orders, pursuant to Rule 4758(a)(1)(A)(xii), check the 
System for available shares and simultaneously route to certain 
destinations on the System routing table that are not posting 
Protected Quotations within the meaning of Regulation NMS (i.e. 
``dark venues'' or ``dark pools''). QCST orders, pursuant to Rule 
4758(a)(1)(A)(xiii), check the System for available shares and 
simultaneously route to select dark venues and to certain low cost 
exchanges. See Securities Exchange Act Release No. 68839 (February 
6, 2013), 78 FR 9957 (February 12, 2013) (SR-NASDAQ-2013-014).
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    With respect to QDRK and QCST orders that access liquidity in the 
NASDAQ Market Center, members will be charged $0.0029 per share 
executed. With respect to QDRK and QCST orders that execute on a venue 
other than NASDAQ, members will be charged $0.0005 per share executed, 
except that for QCST orders that execute on NASDAQ OMX BX, members will 
receive a credit of $0.0014 per share executed.
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.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(4) and (5).
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    The proposed pricing for QDRK and QCST orders executed on NASDAQ is 
reasonable because it is similar to the current pricing for most orders 
executed on NASDAQ. The proposed fee for QDRK and QCST orders that 
execute on a venue other than NASDAQ is s [sic] the same as the current 
fee for TFTY orders, and the credit for orders that execute on NASDAQ 
OMX BX is the same as the current credit for TFTY, SOLV [sic] CART and 
SAVE orders that execute on NASDAQ OMX BX.
    The proposed pricing for QDRK and QCST orders is consistent with an 
equitable allocation of fees and is not unfairly discriminatory because 
the pricing, which is the same for all NASDAQ participants, applies 
solely to members that opt to route QDRK and QCST orders. Moreover, the 
lower cost of these routing strategies as compared with other existing 
routing strategies is not unfairly discriminatory because it is 
consistent with the lower costs associated with routing to the venues 
that are accessed by the new strategies.
    Finally, NASDAQ notes that it operates in a highly competitive 
market in which market participants can readily favor competing venues 
if they deem fee levels at a particular venue to be excessive. In such 
an environment, NASDAQ must continually adjust its fees to remain 
competitive with other exchanges and with alternative trading systems 
that have been exempted from compliance with the statutory standards 
applicable to exchanges. NASDAQ believes that the proposed rule change 
reflects this competitive environment because it is designed to ensure 
that the charges for use of the NASDAQ routing facility to route 
reflect changes in the cost of such routing.

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 order routing is extremely competitive, members may readily opt to 
disfavor NASDAQ's routing services if they believe that alternatives 
offer them better value. Moreover, by introducing new routing options 
and charging fees that NASDAQ believes to be reasonable, NASDAQ 
believes that it is increasing its competitiveness vis-[agrave]-vis 
other trading venues. 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 order execution venues to maintain 
their competitive standing in the financial markets. NASDAQ also does 
not believe that the proposal raises issues of competition among its 
own market participants, because the proposal applies fee and credits 
equally to all participants.

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 is effective upon filing pursuant to 
Section 19(b)(3)(A) \6\ of the Act and subparagraph (f)(2) of Rule 19b-
4\7\ thereunder, because it establishes a due, fee, or other charge 
imposed by NASDAQ.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such 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 under 
Section 19(b)(2)(B) \8\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \8\ 15 U.S.C. 78s(b)(2)(B).
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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-2013-038 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-2013-038. 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

[[Page 15990]]

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 20549-1090, on 
official business days between the hours of 10:00 a.m. and 3:00 p.m. 
Copies of such filing also will be available for inspection and copying 
at the principal offices 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-2013-038, and should be submitted 
on or before April 3, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-05734 Filed 3-12-13; 8:45 am]
BILLING CODE 8011-01-P