[Federal Register Volume 79, Number 197 (Friday, October 10, 2014)]
[Notices]
[Pages 61358-61360]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-24227]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73303; File No. SR-NASDAQ-2014-096]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify NASDAQ Rule 7018 Fees

October 6, 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 September 29, 2014, 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, II and 
III 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 the 
Substance of the Proposed Rule Change

    NASDAQ is proposing to modify NASDAQ Rule 7018 fees assessed for 
execution and routing securities listed on NASDAQ, the New York Stock 
Exchange (``NYSE'') and on exchanges other than NASDAQ and NYSE.
    The text of the proposed rule change is available at 
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, NASDAQ 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 IV below. The Exchange has prepared summaries, set

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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 proposing to amend Rules 7018(1), (2) and (3) to modify 
fees assessed for execution and routing securities listed on NASDAQ 
(``Tape C''), NYSE (``Tape A'') and on exchanges other than NASDAQ and 
the NYSE (``Tape B''), respectively. Currently under each of the rules 
noted above, the Exchange provides a credit of $0.0029 per share 
executed to a member with (i) shares of liquidity provided in all 
securities during the month representing more than 0.10% of 
Consolidated Volume during the month, through one or more of its Nasdaq 
Market Center MPIDs, and (ii) Total Volume, as defined in Chapter XV, 
Section 2 of the Nasdaq Options Market rules, of 100,000 or more 
contracts per day in a month executed through one or more of its Nasdaq 
Options Market MPIDs. The Exchange has the same eligibility 
requirements for this credit tier and provides the same credit to 
members for each of the securities of the three Tapes under its 
rules.\3\ NASDAQ is proposing to reduce the Consolidated Volume 
eligibility requirement of the tier from more than 0.10% to more than 
0.08% for each type of security. The Exchange believes that the 
proposed lower Consolidated Volume requirement will encourage market 
participant activity and will also support price discovery and 
liquidity provision.
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    \3\ See Rules 7018(a)(1), (2) and (3).
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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. This proposal is reasonable, equitable and not 
unfairly discriminatory for the reasons noted below.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(4) and (5).
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    NASDAQ believes that the proposed rule changes to the rebate tiers 
through which members may earn a $0.0029 per share executed rebate are 
reasonable because they will continue to provide a significant price 
reduction for members that support liquidity on both NASDAQ and the 
Nasdaq Options Market, while reducing the Consolidated Volume 
requirement, which may provide incentive to market participants to 
increase their [sic] overall liquidity they provide in order to qualify 
for the credit. In addition, NASDAQ believes that the proposed rule 
changes are consistent with an equitable allocation of fees because 
they reflect an allocation of rebates to liquidity providers designed 
to encourage beneficial market activity, with greater incentives for 
market participants that provide greater liquidity.
    NASDAQ believes that the proposed rule changes are not unfairly 
discriminatory because they apply uniformly to securities of each of 
the Tapes and all members that are eligible for the tier will receive 
the credit. NASDAQ also believes that the changes are not unfairly 
discriminatory because they increase the availability of higher rebates 
without eliminating any of the other means by which a member may earn a 
higher rebate under Rule 7018(a). Lastly, NASDAQ believes that the 
changes are not unfairly discriminatory because market participants may 
qualify for a comparable or a higher rebate through alternative means 
that do not require participation in Nasdaq Options Market.

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

    NASDAQ does not believe that the proposed rule changes will result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended.\6\ 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, or rebate opportunities 
available at other venues to be more favorable. 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. Because competitors are free to modify their own fees in 
response, and because market participants may readily adjust their 
order routing practices, NASDAQ believes that the degree to which fee 
changes in this market may impose any burden on competition is 
extremely limited. In this instance, the change to the routing credit 
tier does not impose a burden on competition because NASDAQ's routing 
services are optional and are the subject of competition from other 
exchanges and broker-dealers that offer routing services, as well as 
the ability of members to develop their own routing capabilities. In 
sum, if the changes proposed herein are unattractive to market 
participants, it is likely that NASDAQ will lose market share as a 
result. Accordingly, 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.
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    \6\ 15 U.S.C. 78f(b)(8).
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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 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.
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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-2014-096 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2014-096. This

[[Page 61360]]

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 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-2014-
096, and should be submitted on or before October 31, 2014.

    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. 2014-24227 Filed 10-9-14; 8:45 am]
BILLING CODE 8011-01-P