[Federal Register Volume 89, Number 95 (Wednesday, May 15, 2024)]
[Notices]
[Pages 42552-42555]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-10594]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100093; File No. SR-NASDAQ-2024-018]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
Relating to Connectivity, Surveillance and Risk Management Services

May 9, 2024.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on April 29, 2024 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 the 
Exchange. The Exchange filed the proposal as a ``non-controversial'' 
proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 
\3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to rule amend Equity 7, Sections 70, 115 116, 
149 and 161, and to remove Sections 116-A and 149-A of the Exchange's 
pricing schedule to retire services and products that have been 
replaced by enhanced services.
    The text of the proposed rule change is set forth below. Proposed 
new language is italicized; deleted text is in brackets.

* * * * *
THE NASDAQ STOCK MARKET LLC RULES
* * * * *
Equity Rules
* * * * *
Equity 7: Pricing Schedule
* * * * *
Section 70. Collection of Exchange Fees and Other Claims and Billing 
Policy

    (a) Each Nasdaq member, and all applicants for registration as 
such, shall be required to provide a clearing account number for an 
account at the National Securities Clearing Corporation (``NSCC'') 
for purposes of permitting the Exchange to debit any undisputed or 
final fees, fines, charges and/or other monetary sanctions or other 
monies due and owing to the Exchange or other charges related to the 
rules, as specified below, and 8000 series rules which are due and 
owing to Nasdaq. If a Nasdaq member disputes an invoice, the 
Exchange will not include the disputed amount in the debit if the 
member has disputed the amount in writing to the Exchange's 
designated staff by the 15th of the month, or the following business 
day if the 15th is not a business day, and the amount in dispute is 
at least $10,000 or greater. The 8000 Series Rules and the following 
Rules will be subject to this Section: Equity 7, Section 10 
(Membership Fees), Equity 7, Section 114 (Market Quality Incentive 
Programs Investor Support Program), Equity 7, Section 115 (Ports and 
other Services), Equity 7, Section 116 (Nasdaq Post-Trade Risk 
Management), Equity 7, Section 118 (Nasdaq Market Center Order 
Execution and Routing), Equity 7, Section 121 (NasdaqTrader.com 
Trading and Compliance Data Package Fee), Equity 7, Section 124 
(Clearly Erroneous Module), Equity 7, Section 127 (Aggregation of 
Activity of Affiliated Members), Equity 7, Section 129 
(Installation, Removal or Relocation), Equity 7, Section 130 (Other 
Services), General 8, Section 1 (Co-Location Services), Equity 7, 
Section 138 (Step-Outs and Sales Fees Transfers), Equity 7, Section 
141 (Nasdaq Regulation Reconnaissance Service), Equity 7, Section 
142 (Non-Tape Riskless Submissions), Equity 7, Section 143 
(Inclusion of Transaction Fees in Clearing Reports Submitted to 
ACT), Equity 7, Section 149 (Nasdaq Real-Time Stats[InterACT]), 
General 8, Section 2 (Direct Connectivity), Equity 7, Section 155 
(Short Sale Monitor), Equity 7, Section 158 (QView), Equity 7, 
Section 160 (Equity Trade Journal for Clearing Firms) and Equity 7, 
Section 161 (Limit Locator).
    (b) No change.
* * * * *
Section 115. Ports and Services [dagger]

    The charges under this section are assessed by Nasdaq for 
connectivity to services and the following systems operated by 
Nasdaq or FINRA: the Nasdaq Market Center, FINRA Trade Reporting and 
Compliance Engine (TRACE), the FINRA/Nasdaq Trade Reporting 
Facility, and the FINRA OTC Reporting Facility (ORF). The following 
fees are not applicable to The Nasdaq Options Market LLC. For 
related options fees for Ports and other Services refer to Options 
7, Section 3 of the Options Rules.
    (a)-(c) No change.
    (d) Reserved[New Nasdaq Workstation]

[[Page 42553]]



------------------------------------------------------------------------
 
------------------------------------------------------------------------
[Nasdaq Workstation Trader].......  [$575 per user per month (including:
                                     data entitlement package; the Trade
                                     Reporting File Upload service,
                                     which allows members to upload
                                     multiple trade reports in batches
                                     to Automated Confirmation
                                     Transaction Service (``ACT''); the
                                     ACT Reject Scan service, which
                                     provides a list of all of a
                                     member's rejected ACT trade entries
                                     and a copy of each rejected trade
                                     report form submitted to ACT; and
                                     the IPO Indicator service, which
                                     provides information on order
                                     execution that would be received in
                                     an IPO during the launch process)].
[Nasdaq Workstation Post Trade]...  [See Equity 7, Section 115(e)].
------------------------------------------------------------------------

    (e) Specialized Services Related to FINRA/Nasdaq Trade Reporting 
Facility

------------------------------------------------------------------------
 
------------------------------------------------------------------------
[WebLink ACT or Nasdaq Workstation  [A subscription includes: the Trade
 Post Trade].                        Reporting File Upload service,
                                     which allows members to upload
                                     multiple trade reports in batches
                                     to ACT; and the ACT Reject Scan
                                     service, which provides a list of
                                     all of a member's rejected ACT
                                     trade entries and a copy of each
                                     rejected trade report form
                                     submitted to ACT].
[ACT Workstation].................  [$625/logon/month].
Nasdaq WorkX......................  $625/logon/month.
                                    [For customers using both Act
                                     Workstation and Nasdaq WorkX, fees
                                     for Nasdaq WorkX will be waived for
                                     the first month of service].
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    (f) TradeInfo

[Members not subscribing to the Nasdaq Workstation using TradeInfo 
will be charged a fee of $95 per user per month.]

    A member firm that has a TradeInfo user subscription may 
subscribe to the Limit Up/Limit Down Band Lookup [add-on service] 
for a fee of $200 per user per month [beginning May 1, 2013]. The 
Limit Up/Limit Down Band Lookup add-on service provides a 
subscribing member firm with intraday and historical limit up/limit 
down price band information for individual securities that are 
subject to limit up/limit down price bands.
    (g)-(j) No change.
    [dagger] Fees are assessed in full month increments under this 
section, and thus are not prorated.
* * * * *
Section 116. [Nasdaq Risk Management

    (a) Clearing brokers using the Nasdaq Risk Management Service 
will be assessed a charge of $0.030 per side per trade monitored by 
Nasdaq Risk Management and a charge of $17.25 per month per 
correspondent executing broker monitored by Nasdaq Risk Management, 
up to a maximum charge of $7,500 per month per correspondent 
executing broker. Clearing brokers with less than 17,000 trades per 
month per correspondent executing broker and that fall below 50 
total correspondents monitored during the month are assessed a 
monthly fee of $500 per correspondent executing broker monitored in 
lieu of the $0.030 per side per trade charge.
    (b) Users of Nasdaq Pre-trade Risk Management (``PRM'') will be 
assessed a monthly fee based on the following table, and such fees 
will not exceed $25,000 per member firm, per month:

------------------------------------------------------------------------
                                  Number of PRM-
          Port tiers              enabled ports     Monthly fee [dagger]
------------------------------------------------------------------------
Tier 1........................  50 or more.......  $400 per port, per
                                                    month.
Tier 2........................  20 to 49.........  $500 per port, per
                                                    month.
Tier 3........................  5 to 19..........  $550 per port, per
                                                    month.
Tier 4........................  1 to 4...........  $600 per port, per
                                                    month.
------------------------------------------------------------------------
[dagger] Fees are assessed in full month increments under this section,
  and thus are not prorated.

    (c) Users of PRM services specified below will be assessed the 
following charges in addition to the applicable PRM-enabled port 
charges:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
PRM Modules............................  No charge.
Aggregate Total Checks.................  No charge.
PRM Workstation Add-ons to an existing   $100 per each PRM Workstation
 Nasdaq Workstation or WeblinkACT 2.0.    Add-on per month.
------------------------------------------------------------------------

Section 116-A. ]Nasdaq Post-Trade Risk Management

    (a) Clearing brokers using the Nasdaq Post-Trade Risk Management 
Service will be assessed a charge of $0.030 per side per trade 
monitored by Nasdaq Post-Trade Risk Management and a charge of 
$17.25 per month per correspondent executing broker monitored by 
Nasdaq Post-Trade Risk Management, up to a maximum charge of $7,500 
per month per correspondent executing broker. Clearing brokers with 
less than 17,000 trades per month per correspondent executing broker 
and that fall below 50 total correspondents monitored during the 
month are assessed a monthly fee of $500 per correspondent executing 
broker monitored in lieu of the $0.030 per side per trade charge. 
[For customers using both Nasdaq Risk Management and Nasdaq Post-
Trade Risk Management, fees for Nasdaq Post-Trade Risk Management 
will be waived for the first month of service.]
* * * * *
Section 149. [Nasdaq InterACT

    Nasdaq InterACT is a surveillance tool that provides summaries 
of a subscribing member's trade activity for the FINRA/Nasdaq Trade 
Reporting Facility. Such summaries include the total number of 
trades that have been reported to the Facility, various statistics 
associated with those trades reported (including: declines, cancels, 
stepouts, as-ofs, etc), the total number of trades that must be 
reviewed for acceptance, and the total number of Regulation NMS 
trade throughs. ``FINRA/Nasdaq Trade Reporting Facility'' shall mean 
the FINRA/Nasdaq TRF Carteret and the FINRA/Nasdaq TRF Chicago.
    InterACT is available for a subscription fee of $400 per month, 
per user, with a maximum fee of $2,400 per month, per member firm.

Section 149-A. ]Nasdaq Real-Time Stats

    Nasdaq Real-Time Stats is a surveillance tool that provides 
summaries of a subscribing member's trade activity for the FINRA/
Nasdaq Trade Reporting Facility to support compliance with FINRA 
rules. Such summaries include the total number of trades

[[Page 42554]]

that have been reported to the Facility, various statistics 
associated with those trades reported (including: declines, cancels, 
stepouts, as-ofs, etc), and the total number of trades that must be 
reviewed for acceptance. ``FINRA/Nasdaq Trade Reporting Facility'' 
shall mean the FINRA/Nasdaq TRF Carteret and the FINRA/Nasdaq TRF 
Chicago.
    Real-Time Stats is available for a subscription fee of $400 per 
month, per user, with a maximum fee of $2,400 per month, per member 
firm. [For customers using both Nasdaq InterACT and Nasdaq Real-Time 
Stats, fees for Nasdaq Real-Time Stats will be waived for the first 
month of service.]
* * * * *
Section 161. Limit Locator

    Limit Locator is a tool to assist a member firm in monitoring 
its trades reported into the FINRA/Nasdaq TRF for compliance with 
the requirements of the National Market System Plan to Address 
Extraordinary Market Volatility. The service provides a subscribing 
member firm with an overview of its trades reported at, or outside 
of, a designated Limit Up/Limit Down pricing band. The service will 
provide a total count of the subscribing member firm's trades in 
each category as well as present this information graphically, on a 
rolling month basis. A subscribing member firm is able to create 
custom email[s] alerts to notify users when a trade is reported at, 
or outside of, a Limit Up/Limit Down pricing band. Limit Locator is 
accessed through Nasdaq WorkX[the Nasdaq Workstation or Weblink ACT 
2.0]and is offered for a fee of $750 per month/per MPID [beginning 
April 8, 2013]. ``FINRA/Nasdaq Trade Reporting Facility'' shall mean 
the FINRA/Nasdaq TRF Carteret and the FINRA/Nasdaq TRF Chicago.
* * * * *
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, 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 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On April 20, 2021, Nasdaq filed a proposal to re-platform three of 
its products for trade reporting, surveillance and risk management 
services--(1) ACT Workstation (``Workstation''),\5\ (2) Nasdaq InterACT 
(``InterACT'') \6\ and (3) Nasdaq Risk Management (``Risk Management'') 
(collectively, the ``Legacy Products''). \7\ These products were 
renamed (1) Nasdaq WorkX\TM\ (``WorkX''), (2) Nasdaq Real-Time Stats 
(``Real-Time Stats'') and (3) Nasdaq Post-Trade Risk Management 
(``Post-Trade Risk Management''), respectively (collectively, the 
``Enhanced Products.''). At the time of the proposal, Nasdaq stated 
that once all current participants had migrated to the Re-Platformed 
products, the Exchange would retire the services and remove the Legacy 
Products from its fee schedule.\8\ The Exchange is proposing to amend 
Equity 7, Sections 70, 115 116, 149 and 161, and to remove Sections 
116-A and 149-A of the Exchange's pricing schedule to retire services 
and products that have been replaced by enhanced services.\9\
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    \5\ Workstation is a web-based application that electronically 
facilitates trade reporting and clearing functions for trades 
reported to the FINRA/Nasdaq TRF. Workstation services include trade 
entry, trade scan, and uploads for bulk trade entry to support 
FINRA/Nasdaq TRF participant trade reporting in accordance with 
Financial Industry Regulatory Authority (``FINRA'') rules.
    \6\ InterACT is a real-time compliance tool that assists firms 
with regulatory supervision of trade activity reported to the FINRA/
Nasdaq TRF. InterACT summarizes and consolidates data for over-the-
counter trade reports to help customers comply with FINRA rules.
    \7\ See Securities Exchange Act Release No. 34-91744 (May 3, 
20221), 86 FR 24685 (May 7, 2021) (SR-NASDAQ-2021-025) (``Initial 
Filing'').
    \8\ Id. at 24686 n. 7, 24687.
    \9\ There will be no changes to the fees as a result of the 
retirement of the retired services.
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    While Nasdaq provided the option of users to maintain access to, 
and utilize, both the Legacy and Re-Platformed Products,\10\ as of 
January 2024, all current participants have fully migrated to the Re-
Platformed Products and no customers currently use the Legacy Products. 
Therefore, Nasdaq is proposing to retire the services and remove the 
Legacy Products from its fee schedule. Additionally, Nasdaq is 
proposing to clarify that certain services that were previously add-on 
services to Workstation will be stand-alone services.\11\
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    \10\ See Initial Filing at 24687; Securities Exchange Act 
Release No. 34-98582 (September 28, 2023), 88 FR 68760, 68761 (Oct. 
4, 2023) (SR-NASDAQ-2023-038).
    \11\ TradeInfo (Section 115(f)) and IPO Indicator (Section 
115(i)) will continue to be available as stand-alone services. IPO 
Locator (Section 161) was previously an add-on and a stand-alone 
service but will only be a stand-alone service accessed through 
WorkX going forward.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\12\ in general, and furthers the objectives of 
Sections 6(b)(4) and 6(b)(5) of the Act,\13\ 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, and is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers. The proposal is also 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.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(4) and (5).
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    The purpose of this proposal is to remove the discontinued Legacy 
Products from the Exchange's rulebook and to inform the SEC and market 
participants of that change. The Exchange believes that the proposal to 
retire the Legacy Products is reasonable and not unfairly 
discriminatory because the Re-Platformed Products provide similar but 
enhanced features and have replaced the Legacy Products. Moreover, no 
participants currently utilize the Legacy Products and have all 
transitioned to the Re-Platformed Products and no participant will be 
disrupted by the proposed change. For the same reason, the Exchange 
believes that the proposed changes remove impediments to and perfect 
the mechanism of a free and open market and a national market system, 
constitute an equitable allocation of fees, and protect investors and 
the public interest because under the proposed rule, the Exchange's 
rulebook would eliminate certain products that are no longer being 
offered to customers and the fees for the Re-Platformed Products would 
continue to remain the same. Additionally, from time to time, the 
Exchange reviews its rulebook to ensure that its fees are accurate and 
align with its current operation to protect investors and the public 
interest.
    The Exchange believes that the proposal is not unfairly 
discriminatory. All member firms have been notified of the retirement 
of the Legacy Products and have had an opportunity to access the 
Enhance Products. Any firm that was not satisfied with the Enhanced 
Products was given over a year to find an alternate service offered by 
a third party. Moreover, the fees for the

[[Page 42555]]

Enhanced Products continue to remain the same for all member firms.

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. As explained 
above, the purpose of this proposal is to remove the discontinued 
Legacy Products from the Exchange's rulebook and to inform the SEC and 
market participants of that change. The Enhanced Products will continue 
to be available to all market participants and the fees will remain the 
same as the Legacy Products.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not:
    A. significantly affect the protection of investors or the public 
interest;
    B. impose any significant burden on competition; and
    C. become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to Section 19(b)(3)(A) of the Act \14\ and 
Rule 19b-4(f)(6) \15\ thereunder.\16\ 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 will institute proceedings to determine whether the proposed 
rule change should be approved or disapproved.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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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-2024-018 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-NASDAQ-2024-018. 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 website (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. Do not include 
personal identifiable information in submissions; you should submit 
only information that you wish to make available publicly. We may 
redact in part or withhold entirely from publication submitted material 
that is obscene or subject to copyright protection. All submissions 
should refer to file number SR-NASDAQ-2024-018 and should be submitted 
on or before June 5, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-10594 Filed 5-14-24; 8:45 am]
BILLING CODE 8011-01-P