[Federal Register Volume 79, Number 37 (Tuesday, February 25, 2014)]
[Notices]
[Pages 10591-10593]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-03970]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71570; File No. SR-NASDAQ-2014-018]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to the Options Regulatory Fee

February 19, 2014.
    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 11, 2014, The NASDAQ Stock Market LLC (``NASDAQ'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``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 the 
Substance of the Proposed Rule Change

    NASDAQ proposes to modify Chapter XV, entitled ``Options Pricing,'' 
at Section 5 governing pricing for NASDAQ members using the NASDAQ 
Options Market (``NOM''), NASDAQ's facility for executing and routing 
standardized equity and index options. Specifically, NOM proposes to 
amend its fees to specify the frequency with which the Exchange may 
change the Options Regulatory Fee (``ORF'').
    While the changes proposed herein are effective upon filing, the 
Exchange has designated that the amendments be operative on March 3, 
2014.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nasdaq.cchwallstreet.com, at the principal 
office of the Exchange, 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. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NASDAQ proposes to amend its Rules at Chapter XV, Section 5 to 
specify the frequency with which the Exchange may change the ORF. The 
ORF is assessed by the Exchange on each member for all options 
transactions executed or cleared by the member that are cleared by The 
Options Clearing Corporation (``OCC'') in the customer range (i.e., 
transactions that clear in the customer account of the member's 
clearing firm at OCC) regardless of the exchange on which the 
transaction occurs.\3\ The fee is collected indirectly

[[Page 10592]]

from members through their clearing firms by OCC on behalf of the 
Exchange. The dues and fees paid by members go into the general funds 
of the Exchange, a portion of which is used to help pay the costs of 
regulation.
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    \3\ NOM Participants who do not transact an equities business on 
the NASDAQ Stock Market LLC in a calendar year receive a refund of 
the fees specified in Rule 7003(b) upon written notification to the 
Exchange along with documentation evidencing that no equities 
business was conducted on the NASDAQ Stock Market for that calendar 
year. The Exchange accepts refund requests up until sixty (60) days 
after the end of the calendar year.
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    In response to feedback from market participants requesting greater 
certainty as to when ORF changes may occur, the Exchange proposes to 
specify in the Pricing Schedule that the Exchange may only increase or 
decrease the ORF semi-annually, and any such fee change will be 
effective on the first business day of February or August.\4\ In 
addition to submitting a proposed rule change to the Securities and 
Exchange Commission (``Commission'') as required by the Act to increase 
or decrease the ORF, the Exchange will notify participants via an 
Options Trader Alert of any anticipated change in the amount of the fee 
at least 30 calendar days prior to the effective date of the change. 
The Exchange believes that by providing guidance on the timing of any 
changes to the ORF, the Exchange would make it easier for market 
participants to ensure their systems are configured to properly account 
for the ORF.
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    \4\ The Exchange monitors the amount of revenue collected from 
the ORF so that it, in combination with its other regulatory fees 
and fines, does not exceed regulatory costs. See, e.g., Securities 
Exchange Act Release Nos. 65913 (December 8, 2011), 76 FR 77883 
(December 14, 2011) (SR-NASDAQ-2011-163).
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    The proposed change is not intended to address any other issues, 
and the Exchange is not aware of any problems that members would have 
in complying with the proposed change.
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with 
Section 6(b) of the Act,\5\ in general, and furthers the objectives of 
Sections 6(b)(4) and (5) of the Act,\6\ in particular, because it 
provides for the equitable allocation of reasonable dues, fees, and 
other charges among its members, issuers and other persons using its 
facilities and does not unfairly discriminate between customers, 
issuers, brokers or dealers.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed change to limit changes to 
the ORF to twice a year on specific dates with advance notice is 
reasonable because it will give market participants certainty on the 
timing of changes, if any, and better enable them to properly account 
for ORF charges among their customers. The Exchange believes that the 
proposed change is equitable and not unfairly discriminatory because it 
will apply in the same manner to all members that are subject to the 
ORF and provide them with additional advance notice of changes to that 
fee.

B. Self-Regulatory Organization's Statement on Burden on Competition

    NASDAQ does not believe that the proposed rule change will impose 
an undue burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed change is not 
intended to address a competitive issue but rather to provide members 
with better notice of any change that the Exchange may make to the ORF. 
In any event, because competitors are free to modify their own fees and 
credits in response, and because market participants may readily adjust 
their trading practices, the Exchange believes that the degree to which 
fee or credit changes in this market may impose any burden on 
competition is extremely limited. As a result of all of these 
considerations, the Exchange does not believe that the proposed change 
will impair the ability of members, or competing order execution 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

    No written comments were either solicited or 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:

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-2014-018 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-2014-018. 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 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-2014-018, and should 
be submitted on or before March 18, 2014.


[[Page 10593]]


    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-03970 Filed 2-24-14; 8:45 am]
BILLING CODE 8011-01-P